Did you know? Credit unions are exempt from the Tennessee transfer tax of $0.37 per $100 on real property that a credit union purchases.
Realty Transfer Tax
This is a tax you pay when you transfer ownership of real estate (like a house or land) from one person or entity to another.
Indebtedness Tax
This separate tax applies when a legal document (“instrument”) shows a debt involved, for example, a mortgage or a loan secured by real estate.
When Both Taxes Apply
If a document (like a deed) transfers ownership and shows that debt (like a mortgage) is involved, then both the realty transfer tax and the indebtedness tax may apply.
Special Rule for Credit Unions
Credit unions in Tennessee do not have to pay the recordation tax (a tax typically charged when recording legal documents like deeds and mortgages) if:
- They are the grantee (the one receiving property) in a warranty deed (a deed that guarantees a clear title), or
- They are the grantor (the one giving the security interest) in a trust deed (similar to a mortgage).
Real estate transfers can trigger two taxes if debt is involved. However, if a credit union receives property or is involved in certain trust deeds, it is exempt from paying the recording fee.
Learn More
For more information, please see the credit union tax exemption on page 14 of the Realty Transfer Recordation Tax Manual [PDF].
