By Eric Berman, REALTOR® | The Eric Berman Team at Compass
TL;DR:
Nashville draws Long Island sellers with a true zero state income tax, lower property taxes, and a city culture that genuinely competes with the Northeast on food, music, and quality-of-life. The trade-offs are a 9.75% sales tax, rising insurance costs from severe-weather exposure, and a market that has become significantly less affordable than it was five years ago. The Long Island sale is still what funds, sequences, and ultimately controls the move.
Why Nashville Has Become a Real Long Island Destination
Five years ago, Nashville wasn't on most Long Island sellers' radar. It is now. The reasons cluster around three different demographics, and a Long Island seller considering the move usually fits one of them clearly.
The first group is working-age professionals — finance, healthcare administration, tech, music industry, creative-class — who have been priced out of New York's tax structure and want a real city in exchange. Nashville delivers that. The second group is younger empty-nesters in their late fifties and early sixties who want a culturally rich destination that isn't Florida and isn't a retirement community. Nashville and the surrounding Williamson County towns of Brentwood and Franklin are the answer. The third group is creative-industry sellers — songwriters, music publishers, performers, producers — for whom Tennessee's elimination of the Hall Tax on royalty income makes an outsized financial difference.
The financial headline is genuinely strong. Tennessee fully eliminated its income tax in January 2021. There is no state tax on wages, dividends, interest, royalties, retirement distributions, or any other income category. None. That is materially different from New York's combined state-and-city burden, which can exceed 12% for high earners. Davidson County's effective property tax rate sits around 0.57% to 0.62% — well below Nassau County's 2%-plus. Williamson County, where the affluent Nashville suburbs sit, runs even lower at around 0.43%, against a much higher median home value (close to $870,000 in some pockets) that rivals North Shore Nassau.
The honest version: the income tax savings are real and large. The property tax savings are real and meaningful. But Nashville's housing market has compressed significantly upward over the last five years, and the assumption that "Tennessee is cheap" needs to be tested against current Nashville and Williamson County prices, not the 2019 version of those numbers.
The 9.75% Sales Tax Is the Trade-Off Everyone Forgets
Tennessee funds its government without an income tax by leaning hard on sales tax. Nashville's combined state-and-local sales tax sits at 9.75% — among the highest in the United States. The structure is 7% state plus 2.75% county. For a seller relocating from Long Island, that is a meaningful structural change in how their household budget works.
The math depends on the seller's spending pattern. A high-earner whose income consists primarily of wages and investment returns, who is moving from New York's roughly 12% combined burden to Tennessee's 0%, captures an enormous net savings even after accounting for the higher sales tax. A retiree drawing down assets at a moderate rate captures meaningful savings as well. A seller whose discretionary spending is unusually high — frequent travel, luxury goods, expensive dining — gives back some of the income tax savings on the sales tax line, but rarely all of it. The net is favorable for almost everyone, but the structure is genuinely different from New York's.
Tennessee also exempts groceries from the standard sales tax — they are taxed at a reduced 4% state rate. That softens the regressive impact of the sales tax structure on essential spending. Prescription medications are exempt entirely.
The Long Island Sale Funds the Nashville Purchase
The same sequencing principle applies here as in any out-of-state move, but Nashville has a wrinkle worth noting: the market has become genuinely competitive in the price bands most Long Island sellers shop in.
Sellers visiting Nashville often expect to find $1.4M Manhasset-equivalent homes for $700,000. Five years ago, that was true. It is no longer. The most desirable Williamson County towns — Brentwood, Franklin, Nolensville, Thompson's Station — now produce comparable homes at comparable prices to many North Shore Nassau communities. Affluent neighborhoods inside Nashville proper — Belle Meade, Forest Hills, Green Hills, Hillwood, parts of West End — are similarly priced. The seller who walks into Nashville expecting a 50% discount on housing will be disappointed in those zip codes. The seller who walks in understanding that the discount is now in the 15-25% range, with a meaningful trade-up in lot size and quality-of-construction, will have a better experience.
The cleaner sequence: the Long Island home sells first, or at minimum lists first with a realistic price-to-DOM expectation. Equity from the Manhasset, Port Washington, or Garden City sale becomes the down payment in Tennessee. The closing timeline on the LI side dictates when the Nashville offer can responsibly go in. For sellers in higher price bands, this also means the New York Mansion Tax — 1% of sale price on transactions $1M and over — gets accounted for in net-proceeds math before any Tennessee budget is locked in. Tennessee has its own transfer tax (the realty transfer tax), typically 0.37% on the consideration paid, which is a relatively modest closing cost compared to New York's structure.
Capital Gains, Cost Basis, and the Estate Planning Layer
A meaningful share of Long Island sellers heading to Nashville have owned the same home for fifteen, twenty, or thirty years. The financial conversation for that seller is fundamentally different from the one a five-year owner has.
The federal capital gains exclusion shelters $250,000 of gain for a single filer or $500,000 for a married couple filing jointly on a primary residence owned and lived in for two of the last five years. That works for most middle-market Long Island sellers. It does not work for someone who bought a Manhasset, Jericho, or Garden City home in the 1990s or earlier, where long-held appreciation routinely runs $700,000 to $1.5M+ above original cost basis. Cost basis can be reconstructed for sellers who kept records. Capital improvements over the life of the ownership — kitchens, bathrooms, additions, roofs, major systems — add to basis and reduce the taxable gain. So do certain selling expenses. This is CPA work that needs to happen before listing, not after.
Tennessee adds a meaningful estate planning layer. Tennessee has no state estate tax, no inheritance tax, and no gift tax. New York does have an estate tax with a "cliff" structure that can produce surprising tax exposure for estates that fall just above the threshold. For a Long Island seller who is also doing serious estate planning — particularly senior sellers with significant assets beyond the home — establishing genuine Tennessee domicile has measurable downstream consequences for how the estate is settled. Florida offers similar advantages, but Tennessee gets less attention as an estate-planning destination because the income-tax story dominates the conversation. For sellers whose estate plan is part of the move, Tennessee deserves a place in the comparison alongside Florida.
The Insurance and Climate Conversation
The line item most Nashville-bound sellers underestimate is insurance.
Middle Tennessee sits in an active severe-weather corridor. Tornadoes are a real risk — the March 2020 and December 2023 tornadoes that hit the Nashville metro caused billions of dollars in damage. Severe thunderstorms, hail, and wind events have driven home insurance premiums sharply higher over the last five years. Sellers leaving Long Island, where insurance is among the cheaper line items in the household budget, often experience a real shock when they receive their first Nashville insurance quote. The premium increase frequently runs 50% to 100% above what they were paying for comparable coverage on Long Island.
This doesn't kill the move. Tennessee's overall cost picture is still favorable. But it is a real number that should be in the budget model before any offer goes in — and it should be a real quote on the specific target home, not an estimate based on national averages. The wind deductible structure on a Tennessee policy is also worth understanding before closing.
The climate adjustment is also real. Nashville summers are hot and humid, with extended stretches in the high 80s and 90s. Winters are mild but produce occasional ice storms that can shut down the metro for days. Spring is tornado season. Sellers who heavily use outdoor space year-round should understand that the usable outdoor calendar is differently shaped than Long Island's.
Nashville Is Three Different Markets
Long Island sellers tour Nashville and often make the mistake of treating "Nashville" as a single market. It isn't.
Inside the city — Belle Meade, Forest Hills, Green Hills, Hillwood, Sylvan Park, 12 South, East Nashville, Germantown — is the urban core. Some neighborhoods are dense and walkable in a way that mirrors a Brooklyn brownstone block; others are leafy and large-lotted in a way that feels closer to a Long Island village. Property taxes are at Davidson County rates. School zoning is variable, and the Nashville public-private school landscape is more complex than most Long Island districts.
Williamson County — Brentwood, Franklin, Cool Springs, Nolensville, Thompson's Station — is where most affluent Long Island sellers actually land. Larger lots, mature neighborhoods, top-rated public schools (district name only, factual), lower property tax rates than Davidson County, and a suburban character that maps cleanly onto Glen Head, Roslyn, or parts of Manhasset. Median home values run higher than Davidson County, often substantially. This is the corridor for the Long Island seller looking for a "Nashville" lifestyle without committing to the urban core.
The further-out counties — Maury (Spring Hill, Columbia), Robertson (Springfield), Sumner (Hendersonville, Gallatin) — offer significantly more land and lower price points, but the trade is longer commutes into Nashville and a different cultural feel. These are the markets for buyers willing to drive forty-five minutes for ten acres.
A Long Island seller who tours Nashville for one weekend in one neighborhood is making a much narrower decision than they realize. Two separate visits, ideally covering both inside-the-city and Williamson County, is the minimum.
A Practical Pre-Listing Roadmap
The cleanest version of this move starts twelve to eighteen months out. The first six months are research — running the actual tax math with a CPA, getting real Tennessee insurance quotes on two or three target neighborhoods, narrowing Nashville to specific zip codes, and getting a realistic Long Island home valuation. A home valuation done early gives the seller a real number to plan around, not a Zestimate guess.
The next six months are prep. Cost basis documentation, capital improvement records, conversations with a New York real estate attorney about the closing process — including the PCDS disclosure, the binder-and-contract sequence, and the typical 10% earnest money structure. This is also the window for repairs that will actually pay back at sale, the staging conversation, and the photography and marketing strategy for the listing itself.
The final phase is the listing and the parallel Nashville search. By the time the Long Island home goes live, the seller knows what their net proceeds will be in three or four scenarios, what the Nashville budget looks like in each, and how the closing timelines will align.
Frequently Asked Questions
Q: Does Tennessee really have no state income tax at all?
A: Yes. Tennessee fully eliminated its income tax — including the Hall Tax on dividends and interest — effective January 2021. There is no Tennessee tax on wages, salaries, dividends, interest, royalties, retirement distributions, or any other income category. This is one of nine true zero-income-tax states in the country. Tennessee funds its government primarily through sales tax (9.75% combined in Nashville), property tax, and excise taxes.
Q: What about capital gains tax on a long-held Long Island home?
A: The federal exclusion shelters $250,000 of gain for single filers and $500,000 for married couples filing jointly on a primary residence owned and lived in for two of the last five years. Sellers who have owned the same Long Island home for two or three decades routinely have appreciation well above those thresholds. Cost basis reconstruction — capital improvements, major systems, additions, certain selling expenses — reduces the taxable gain. This is a CPA conversation that needs to happen before listing, not after.
Q: Is Nashville still affordable for Long Island sellers?
A: Less than it was. Nashville's housing market has compressed upward significantly over the last five years. Affluent inside-city neighborhoods (Belle Meade, Forest Hills, Green Hills) and the Williamson County corridor (Brentwood, Franklin) now produce home prices comparable to many North Shore Nassau communities. The discount versus Long Island is real but in the 15-25% range in those zip codes, not the 50% discount that existed five years ago. Outside the affluent corridor, the discount is larger. The income tax and property tax savings are unaffected by the housing-cost compression.
Q: How serious is the insurance issue in Nashville?
A: It is the most-underestimated line in the budget. Severe-weather and tornado exposure has driven Tennessee home insurance premiums sharply higher over the last five years. Long Island sellers commonly experience a 50% to 100% increase in premium for comparable coverage when they relocate. Real quotes — not estimates — should be in hand before any offer goes in. Wind and tornado deductible structures on Tennessee policies also deserve direct review.
Q: Should the Long Island home be sold before buying in Nashville?
A: In most cases, yes. Selling first locks in actual equity, removes buy-side timing pressure from the Long Island listing, and produces the cleanest financing math on the Nashville purchase. The exception is a seller with substantial outside liquidity who can carry both homes briefly. For everyone else, the sequence that protects net proceeds is sell-first or list-first-with-flexibility.
Closing Thought
A move from Long Island to Nashville is two transactions, not one. The Nashville half gets the emotional attention — the new neighborhood, the music, the new chapter — but the Long Island half determines how the move actually goes. Selling well on this side of the country produces the equity, the timing, and the calm to buy well on the other. For sellers thinking through this conversation, a quiet home valuation is a useful starting point. Reaching out to talk through the timeline, with no pressure either way, is welcome too.
By Eric Berman, REALTOR® | The Eric Berman Team at Compass
Eric Berman | Long Island & Queens REALTOR® | Compass 1468 Northern Blvd, Manhasset, NY 11030 (917) 225-8596 | eric@ericbermanteam.com | theericbermanteam.com
