What are the rules for taxation of foreign real estate?
In Tennessee, foreign real estate is subject to taxation just like any other real estate located in the state. Foreign real estate is referred to as any real estate that is owned by a person who resides outside the state of Tennessee. The first step in taxation of foreign real estate is to determine the fair market value of the property. The Department of Revenue will assess the tax based on the fair market value of the property, even if some of the improvements or renovations have been made to the property. The owner of the foreign real estate is responsible for paying the taxes owed on the property. The Department of Revenue will collect the taxes either directly from the owner or through a representative of the owners. The owner is required to submit a completed Foreign Real Estate Tax Declaration Form to the Department of Revenue and is responsible for ensuring that the form is completed accurately and completely. The form must include the name and mailing address of the owner, the legal description of the property, and the estimated fair market value of the property. Once the taxes have been paid, the Department of Revenue will issue a Real Estate Tax Receipt that will show the amount of taxes paid and the tax rate that were applied to the foreign real estate. It is important to note that the tax rate applied may be higher than the rate applied to real estate located within the state of Tennessee. It is also important to keep in mind that the taxes must be paid on an annual basis. If the taxes are not paid on time, the owner of the foreign real estate may be subject to penalties and interest.
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