Property taxes are huge headaches for anyone interested in real estate investing but are a necessary measure toward increasing your net worth. Property taxes in the state of Mississippi are among the lowest in the nation, making it a desirable place to invest.
Before you dive too deep into a Mississippi property, make sure to learn more about the local tax code so that you can be prepared for your future tax bills. Here is your brief guide to property taxes in Mississippi.
Overview of Mississippi Property Taxes
Taxes in the USA are always complicated, and it's no different for property owners in Mississippi. Homeowners must deal with taxes at the federal, state, and local levels.
The Mississippi property tax filing date is February 1st.
Mississippi homeowners are subject to annual taxes that help fund local services. This amount is based on the assessed value of the home and the region in which it resides. Furthermore, it also considers whether the owner lives on the property itself.
Owners living on the property itself look at 10% of the market value for calculations. Meanwhile, properties without the presence of an owner must consider 15% of the market value.
County authorities conduct valuations once every four years to determine the market value of the property.
The next factor involved in Mississippi tax calculations is the "millage rate." The mill amount is $1 per every $1,000 of the market value. This value changes every year at the discretion of the local authorities.
Example Calculation:
Formula = Assessed property value * 10% tax * Millage Rate (Alcorn county)
($100,000 * 10% tax) * 100 * $1 / $1,000 = $1,000 per year in property taxes
This calculation is an example estimate for Mississippi property taxes. The actual amount of your investment property tax will be on your property tax statement. A certified tax professional can perform any calculations for you and describe any tax requirements.
Real Estate Transfer Taxes
Property transfers in the USA are generally subject to transfer taxes. The amount is levied by state authorities, so it will be different for each state. Mississippi does not impose any transfer taxes.
Real Estate Capital Gains Tax
Federal capital gains tax comes into effect for selling properties. In general, you are subject to capital gains tax for making more than $250,000 profit on the sale of your home, or more than $500,000 profit as a married couple.
Mississippi residents pay capital gains tax equal to their income tax rate.
Property Taxes in Mississippi in a Nutshell
Owning property in Mississippi is a dream come true for many people, even with the associated property taxes involved. Although it is best to seek the help of a tax professional, the advice above gives you a general understanding of the property taxes in Mississippi.
We hope that this guide has helped you learn more about the Mississippi property tax code. Once you're aware of the tax implications and are ready to take the leap into property investment, contact us to help manage your property!
Cissell Management Company is a trusted full-service property management company in the Oxford, MS area since 2011, and we're ready to help you increase your net worth.
