The Ultimate Guide to Mississippi Real Estate Taxes

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By Clever Real Estate Updated June 5, 2023


Calculating how much you need to pay in property taxes is complicated. You’ll likely need to pay taxes at a federal level if you make a profit from the sale of your home. In Mississippi, you’ll also need to pay annual property taxes, which varies depending on your local county.

The Ultimate Guide to Mississippi Real Estate Taxes

Trying to understand real estate taxes can be a complex battleground. Not only do you need to make considerations about property taxes at a federal level, but also the taxes imposed by the state of Mississippi.

Property taxes can also be overseen by local authorities on a county, or even city basis.

Although we would suggest you use the services of a qualified tax professional, we’ve created a guide to Mississippi real estate taxes to help you clear the mist.

This includes taxes due when you sell your property, whether you’ll need to pay transfer taxes, and how annual property taxes are calculated.

Will You Have to Pay Taxes When You Sell Your Home in Mississippi?

Regardless of where you are based in the U.S., you might need to pay federal taxes when you sell your property. Known as capital gains tax, this is based on whether or not you made a profit of more than $250,000 when you sold your home. This increases to $500,000 if you’re married.

There might be circumstances where you can avoid paying capital gains tax on the sale of your Mississippi home. This is usually the case if you don’t meet the above capital gains threshold, have lived in the property for at least two of the last five years, and haven’t previously excluded property capital gains within the last two years.

On top of your federal property tax obligations, you’ll also need to consider state taxes. In Mississippi, capital gains tax amounts to the same rate as your income tax rate.

How Much Are Real Estate Transfer Taxes in Mississippi (and Who Pays Them)?

When you sell your property in the U.S., and subsequently transfer ownership to another person, you're usually liable to pay transfer taxes. The rates vary on a state-by-state basis, and in some cases, at a regional level.

Fortunately for you, Mississippi is one of five U.S. states that does not impose transfer taxes.

» MORE: How Much Are Closing Costs for Sellers in Mississippi?

How to Calculate Property Taxes in Mississippi

If you are currently a homeowner in Mississippi, or you’re thinking about buying, then you need to be made aware of annual taxes. This is the amount that you pay every year to help fund local services.

Attempting to calculate how much you are likely to pay is a complex task. This is because property taxes in Mississippi are based on the value of your home, as well as the specific region that you live.

At a state-level, Mississippi actually has some of the lowest property taxes in the country. While the U.S. averages an annual property tax payment of $3,028 per household, Mississippi averages just $1,960. This amounts to approximately 0.785% of the "assessed home value."

If the property is occupied by the owner, then the assessed value amounts to 10% of the market value. All other Mississippi homeowners will pay 15% (for example if you are renting your home out). It is the responsibility of county authorities to determine what your home is worth, and this is evaluated at least once every four years.

For example, if you are an occupied-homeowner based in DeSoto, and the property has a market value of $180,000, then your property taxes are calculated against a figure of $18,000 (10% of $180,000 market value).

Once the assessed value of your property has been ascertained, you then to find out what the "millage rate" is in your specific Mississippi county. One "mill" amounts to $1 for every $1,000 against the assessed value.

This varies each year depending on how much the country needs to raise to provide its services.

Here’s a quick example so you understand how property taxes are calculated in Mississippi.

  1. You are a homeowner based in Adams County, resident in your property.
  2. Your property has a market value of $200,000.
  3. Your assessed value is based on 10% of $200,000, which is $20,000.
  4. Adams County has a millage rate of 100.
  5. You would pay $2,000 per year in property taxes.
  6. Your effective property tax rate would be 1% ($2,000/$200,000).

Property taxes are due by February 1st each year in Mississippi.

The process of calculating what you actually owe is a complex process, which is why you should have a conversation with a local buyer’s agent. They’ll have extensive knowledge of the Mississippi housing market, meaning they’ll be able to explain what taxes you will be liable for.

Tax Breaks for Mississippi Home Buyers & Sellers

Although it is best to seek guidance from a professional tax advisor, you should consider whether or not you qualify for certain property tax exemptions. Both buyers and sellers have access to tax breaks, so we’ve listed some of the most notable.

Tax Breaks and Credits for Buyers

  • First-Time Home buyer Savings Account: If you're based in Mississippi and yet to own a home, you can benefit from the First-Time Home buyer Savings Account. You can deduct up to $2,500 ($5,000 for couples) from your state gross income every year until you buy your first home.
  • Mortgage Credit Certificate (MCC) program: By going through the Mississippi Home Corporation, you can access the federal-wide Mortgage Credit Certificate (MCC) program. This allows first-time buyers to claim 20% of mortgage interest paid, which is then deducted against federal taxes.

Read more about how a Clever Partner Agent can guide through the Mississippi home buying process, including that of any tax breaks or credits you might be eligible for.

Tax Breaks and Write-Offs for Sellers

  • General costs associated with selling: When you sell your home, you’ll likely to encounter a range of costs, such as legal fees and home inspections. The IRS allows you to deduce these expenses against your tax return.
  • Moving expenses: You have the option of deducting moving expenses from your tax return if you are actively serving in the U.S. military.
  • Repairs/Revelations: If you have had to make repairs or renovations to assist with the sale of your property (such as roof repairs), then these costs are tax deductible.

Read more about how a Clever Partner Agent can find you additional cost savings when selling your Mississippi home.

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