Moving from California to Tennessee: Buying Your Next Home (2026)

Why we wrote this

Colleen is licensed in Tennessee as well as California, so we wrote down what changes when you buy there. We can help with your Tennessee purchase, and we'll tell you plainly what we can and can't speak to. For taxes, we point you to the official pages and to a tax professional.

Selling here and buying there: the order of steps

Most moves from California to Tennessee come down to one question: which home do you deal with first? There are three common ways to order it. None is right for everyone.

Buy first, then sell. You buy in Tennessee while you still own the California home. This can give you time to move without a rush. It also means you may own two homes for a while, and the lender may need to look at both. Ask us how that works for your situation.

Sell first, then buy. You sell the California home, then buy in Tennessee. The proceeds from the sale may help with the next purchase, but you'll need the sale to close first. Ask your agents how to build in time if the dates slip.

Both in the same week. Some families line up both closings close together. It can work, but it leaves little room for delays. Your lender, your California agent, your Tennessee agent and both escrow or title teams all need to know the plan.

Whichever way you go, here's a simple order:

1. Talk with a lender first. Before you list, ask what you'd need to qualify for the Tennessee home and what the lender will need to see about your California home.
2. Pick your agents. You'll want one in California for the sale and one in Tennessee for the purchase. We're glad to talk with both.
3. Set the timeline together. Put the listing date, the closing dates and your move date on one calendar.
4. Ask about the paperwork early. Your sale in California and your purchase in Tennessee each have their own steps and documents.

California real estate withholding and Form 593

When you sell California property, the Franchise Tax Board (FTB) says: "Real estate withholding is a prepayment of income tax due from the selling of California land or anything on it." Some sales are exempt. FTB says that to claim an exemption you "submit Form 593 to your escrow agent before closing."

That form goes to escrow before closing, so ask your escrow officer about it at the start. Whether withholding or an exemption applies to your sale is a question for your escrow officer or a tax professional. FTB's page has the rules.

Source: FTB, real estate withholding (updated January 7, 2026).

Keeping your California home as a rental

Some families keep the California home and rent it out. If that's your plan, tell your lender early. Whether and how rent counts for qualifying depends on the loan and the lender, so we'll walk through it with you.

On taxes, FTB says that if you become a part-year resident, you pay California tax on "All worldwide income received while a California resident" and on "Income from California sources while you were a nonresident." FTB's list of California-source income includes "Rent from real property located in California" and "The sale or transfer of real California property."

So rent from a California home can still be California-source income after you've moved. Talk to a tax professional about how that works for you.

The home sale exclusion

If you sell your main home, the IRS says in Topic 701 that "you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse."

The IRS says there is an ownership and use test: you must have owned and lived in the home "at least 24 months (2 years) out of the last 5 years," and "you must meet both tests during the 5-year period ending on the date of the sale."

If you or your spouse are on qualified official extended duty in the Uniformed Services, the IRS says you "may elect to suspend the five-year test period for up to 10 years."

If you've rented the home out, your dates matter. Ask a tax professional to check them before you set a closing date.

Costs that change in Tennessee

Some costs work differently in Tennessee. In brief:

• Property tax is figured differently. Tennessee's county assessor sets the value, and the county sets the rate.
• Recordation taxes on a Tennessee purchase include a transfer tax and a tax on the mortgage.
• Income tax: Tennessee's Hall income tax applied only to interest and dividends, and it was repealed for tax periods beginning January 1, 2021 or later.

We explain each of these, with the official sources, in our companion guide: Tennessee property tax and income tax, explained for Californians. For your own numbers, talk with a tax professional.

Loan options

The loans work the same way. FHA and VA loans work the same way in Tennessee as in California, and so do Fannie Mae and Freddie Mac conventional loans. Loan limits can differ by county; ask us about the county you're looking at.

Our two loan-type guides explain how these loans work:

• FHA or conventional? How to choose (2026)
• VA home loans in California (2026)

Please note: those guides were written for California buyers. Their county loan limits, CalHFA, Mello-Roos and property tax details are California's, and they don't apply to a Tennessee home. The way the loans work does.

We'll add Tennessee's state housing agency programs here once we've confirmed the details.

Questions to ask before you move

Bring these to your lender, your agents and a tax professional:

The bottom line

Moving states means two homes, two sets of rules and two closings, and the order you do things in matters. Start with a conversation about the Tennessee purchase before you sell here. Colleen is licensed in California and Tennessee, and she'll walk you and your agents through the timing. We'll tell you what we know, and point you to an official source or a tax professional for the rest.

Questions buyers ask