Tennessee inheritance tax and estate tax in 2026: what heirs of a Franklin home actually pay

At a glance

Does Tennessee have an inheritance tax in 2026?

If someone died in Tennessee in 2016 or later, there is no Tennessee inheritance tax to pay and no Tennessee inheritance tax return to file. The Department of Revenue says plainly not to file for decedents with dates of death in 2016 or later.

Tennessee also has no estate tax of its own and no gift tax. So for nearly every family that inherits a home in Franklin, Leiper's Fork or College Grove, the state adds no death tax at all. The federal estate tax is a separate question that turns on the size of the whole estate, not the value of one house.

What does continue is the cost of owning the property: the annual Williamson County property tax bill, insurance and any HOA dues. Those are the numbers most heirs of a $1M+ home actually feel.

Estate, inheritance and gift taxes in Tennessee

Tennessee inheritance tax: repealed

Before repeal, Tennessee's inheritance tax applied to the value of a decedent's estate above the exemption amount for the year of death. It is no longer imposed after December 31, 2015. Estates of people who died in 2015 or earlier are a closed, technical area; if one is still open, it is a question for a Tennessee estate attorney.

Tennessee estate tax: none

Tennessee does not levy a separate state estate tax today. Searches for "Tennessee estate tax" usually mean the old inheritance tax, which was measured on the estate and is gone.

Tennessee gift tax: none

Tennessee does not tax lifetime gifts. Giving a child a share of a Franklin property or cash toward a down payment creates no Tennessee gift tax. Federal gift rules can still require a return, as described below.

Federal estate tax: estates above $15,000,000 in 2026

The IRS sets the federal estate tax basic exclusion at $15,000,000 for people dying in 2026, up from $13,990,000 for 2025. The IRS says the law signed July 4, 2025 amended the Internal Revenue Code to set that $15,000,000 figure for 2026. An estate below the exclusion owes no federal estate tax. An estate above it may, depending on deductions and planning that only an estate attorney or CPA can assess.

Federal annual gift exclusion: $19,000 per recipient

For 2026 a person can give up to $19,000 to each recipient without using any of their federal exclusion. Larger gifts are not necessarily taxed, but they can require a federal gift tax return. Ask your CPA before making a large gift of cash or a share of real estate.

Hall tax on inherited investments: gone

Tennessee's Hall income tax on interest and dividends was repealed for tax periods beginning January 1, 2021, and Tennessee has no tax on wages. So interest and dividends from an inherited portfolio are not taxed by Tennessee. Federal income tax rules still apply. The Tennessee income tax guide has the full history.

Capital gains on inherited property

Tennessee has no individual income tax, so it does not tax a gain when you sell an inherited home. How the federal government measures and taxes that gain depends on your basis and the facts of the estate. That is a CPA question; don't rely on a general rule found online.

Costs that come with an inherited Franklin home

Property tax continues every year

Williamson County bills property tax to the owner of record as of January 1, and each bill covers January 1 through December 31. Bills are mailed in early October and due by February 28. An estate or heir that owns the home on January 1 receives that year's bill. The rate depends on where the parcel sits: the 2026 rate per $100 of assessed value is $1.30 outside any city, $1.566 inside Franklin outside the Franklin Special School District, and $2.2433 inside both. The Williamson County property tax guide shows bills from $1M to $3M and how appeals work.

Greenbelt on inherited farmland

Farms and larger tracts around Leiper's Fork and College Grove may be enrolled in greenbelt, which values qualifying agricultural, forest or open-space land on its present use rather than market value. Greenbelt status does not carry over automatically: new owners of property already in greenbelt must reapply, and applications are due by March 15 of the year sought. An heir who misses that date can see the land taxed at market value. Confirm with the Williamson County Assessor how the rule applies to a transfer through an estate.

Transfer tax when the home is deeded or sold

Tennessee's realty transfer tax is $0.37 per $100 of value, and it applies to transfers of real property with certain exceptions. Whether a deed from an estate to an heir is one of those exceptions depends on how the transfer is made. Ask the closing attorney before recording. If the heir later sells, the buyer is the party liable for transfer tax under Tennessee law; the Tennessee closing costs guide explains the rest of the sale costs.

Insurance and HOA dues while the estate is open

A vacant or estate-owned home can raise questions a standard homeowner's policy may not answer. Call the insurer as soon as possible to confirm the policy stays in force and who must be named on it. If the home is in an HOA community, ask the association for the current dues, any balance owed and its rules for a change of owner.

Examples: Franklin and College Grove estates

Both examples use 2026 figures and assume the county's appraised value equals market value. They show which taxes apply, not what any family will owe.

In the second case the federal tax figure depends on deductions, the federal rate schedule and planning choices, so it is left to the family's estate attorney and CPA. The point is that Tennessee itself adds nothing on top.

If you are deciding whether to keep or sell an inherited Franklin home, I can give you a current view of what comparable homes are selling for, which is often the first number an estate needs.

Dates and steps after inheriting a home in Williamson County

1. Confirm the date of death. For 2016 or later, no Tennessee inheritance tax return is filed.
2. Have an estate attorney handle title. Probate, a trust or another method decides how and when the deed moves to you.
3. Check the January 1 owner. The property tax bill for the year goes to the owner of record on January 1. Make sure someone receives and pays it by February 28.
4. Reapply for greenbelt by March 15 if the land was in the program.
5. Look up the parcel in the Williamson County Property Assessor's database to see its appraised value and tax district.
6. Ask a CPA about federal filings, including any estate tax return and your basis in the home before a sale.

Common mistakes heirs make

• Filing a Tennessee inheritance tax return that isn't required. For deaths in 2016 or later, there is nothing to file.
• Missing a property tax bill. Interest begins on March 1, and the Trustee cannot waive it.
• Letting greenbelt lapse. A missed March 15 reapplication can move farmland to market-value taxation.
• Applying a national rule of thumb to the federal side. Exclusion amounts change; the 2026 figure is $15,000,000 per the IRS.
• Assuming the deed to an heir is tax-free. Ask the attorney whether the transfer qualifies for an exception to transfer tax.

If you are moving to Franklin and planning your own estate, the moving to Franklin from California guide covers the other differences. This page explains how the taxes work; it is not legal or tax advice. Confirm your situation with a Tennessee estate attorney or CPA.

Common questions

Sources

• Tennessee Department of Revenue: Inheritance Tax
• Higgins Estate Group: Tennessee Has No Inheritance Tax or Gift Tax (2026)
• IRS: What's new, estate and gift tax (last reviewed 23-Jul-2026)
• Tennessee Department of Revenue: Hall Income Tax
• Williamson County Trustee: Frequently Asked Questions
• Williamson County Trustee: 2026 Property Tax Rates & Calculator
• Tennessee Comptroller: How to Calculate Your Tax Bill
• Williamson County Assessor: Greenbelt
• Tennessee Department of Revenue: Realty Transfer and Recordation Tax Manual (March 2022)
• Williamson County Property Assessor: property search