Property Tax in Mississippi: Everything You Must Know As a Landlord or Property Manager

Many people dream of living in Mississippi. Besides being home to the country's largest river, this state is famous for its charm, hospitality, and low-cost living.

Additionally, the Magnolia State offers some of the most lucrative investment opportunities for real estate investors and property managers, as the market is thriving and land prices are constantly rising.

However, before investing in a Mississippi property or starting your rental business in this state, you should consider many things, including property taxes taxes.

If you develop a good strategy to reduce your tax liability, you can improve your financial position and even save on your annual expenses, leading to higher profits.

Many believe that understanding how property taxes work is difficult and time-consuming, but we make it easier. Here's all the information you need to know about your tax obligations, options to reduce these amounts if you live in this state, and more.

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Understanding Different Types of Property Tax Bills in Mississippi

In Mississippi, all types of property are subject to "ad valorem" taxes unless exempted by law.

"Ad valorem" taxes are imposed on the ownership or possession of property based on the true value of the home, building, portion of land, or item assessed.

Local taxing authorities assess these property taxes, as property tax dollars fund county and city governments and school districts.

How Many Times Do You Pay Property Tax a Year in Mississippi?

In this state, property taxes are due on or before February 1 for properties assessed during the previous year. It's important to pay taxes as required, since missing deadlines can result in penalties and late fees.

However, if February 1 falls on a legal holiday or weekend, you can wait until the following Monday to pay your tax bill without interest or penalties.

Consequences of Late Payments for Property Taxes

As mentioned, delinquent property taxes draw interest and penalties. In the worst-case scenario, you can lose your home if you fail to pay your bills before the deadline.

Let's take a closer look at each scenario.

Financial Penalties

Mississippi law requires taxpayers to pay their bills and file reports on specific dates. If you fail to do so, you'll be charged both penalties and interest.

The penalty for late tax payment in Mississippi is 10% of the tax amount. Late fees are often charged 60 days after the due date.

Also, you may be subject to an additional 10% penalty if you don't file your reports on time.

Liens

If you don't pay your taxes on time, the amount you owe becomes a lien on your property. It acts as collateral, which local government units can use to repay the debt.

In this state, the county treasurer can hold a tax sale after placing a lien on the property. This process involves selling the property with delinquent taxes to collect the amount owed.

Tax Sale

A local government official can sell your property at a local tax auction on the first Monday of April or the last Monday of August.

Typically, the bidder who pays off the debt gets the lien and the tax certificate. However, it's "struck off" or sold to the state if no one bids at the auction.

Taxpayers can redeem their properties by paying off the debt with interest and penalties or by paying the buyer. However, you only have two years to do this.

If you don't pay your debt before the redemption period ends, the buyer can use the tax certificate to get a tax deed on your property.

How to Pay a Property Tax Bill in Mississippi

Mississippi residents and homeowners are required to pay taxes to their county Tax Collector according to the location of their property.

Payment methods vary from county to county, but there are usually multiple options for paying property taxes in Mississippi, including the following:

• Cash
• Certified funds
• Money orders
• Checks
• Credit cards

How Much Is Property Tax in Mississippi?

In Mississippi, the county assessor should determine the properties' true value, which is how you determine the assessed value. However, this isn't the only element that affects property tax bills.

First, there's the assessment ratio, which could be 10%, 15%, or 30%. In addition, multiple taxing entities levy the tax, including the municipality, the county, and school districts. Each unit must determine how much it needs. Local officials use that information to calculate the rate.

Overall, this state has low taxes, with a median annual property tax payment of $1,097. It's considerably lower than the national average ($2,795).

However, these taxes can be higher depending on the location of your property. In Hinds County, the most populous county, the tax rate is 1.09%, which is above the state average. Also, the countywide mileage rate is 119.87.

Madison County, a central Mississippi county, doesn't have a high property tax rate. It's only 0.81%. However, it has the highest median home value. As a result, homeowners pay around $1,828 in taxes each year.

How is Property Tax Calculated in Mississippi?

To calculate your property taxes, you need a few metrics: true property value, assessment ratio, and millage rates.

First, you should multiply the true value of your property by the appropriate assessment ratio. The result will be the assessed value.

After that, you should multiply the assessed value by the local property tax rate or millage rate, which is determined by local tax authorities and equals $1 of tax per $1,000.

This is how it should look:

True value x Assessment Ratio x Millage Rate = Property Taxes

Assessment Ratios

The Mississippi Constitution sets assessment ratios according to five property classes::

• Class I: Single-family, owner-occupied, residential properties (10% of the true value)
• Class II: Other real properties, including those included in Class II and IV (15% of the true value)
• Class III: Personal property, except properties included in Class IV and motor vehicles (15% of the true value)
• Class IV: Public utility property or property owned by service corporations that must be assessed and appraised by the state or county, excluding motor vehicles, railroad, and airline property (30% of the true value)
• Class V: Motor vehicles (30% of the true value)

How Can I Lower My Property Taxes in Mississippi?

If you want to reduce your property taxes in this state, you can consider one of the following legitimate options.

Appeals

Mississippi homeowners can schedule a hearing with the county Board of Supervisors through the Chancery Clerk.

Taxpayers can file appeals by the first Monday in August preceding the tax payment due date.

Exemptions, Reimbursements, and Credits

In addition, you can consider the following exemptions, credits, and reimbursements to reduce your property taxes:

• Homestead Exemption, which includes exceptions for people over 65 or totally disabled and veterans
• Industrial Exemptions
• Legislative Tag Credit
• Reimbursement from the Tax Commission
• Property Type Exemption

Be sure to check with an expert or your assessor's office about criteria, such as whether exemptions are specifically for owner-occupied residential properties.

Conclusion

Mississippi is an attractive destination for those looking for a new place to live or a thriving real estate market to invest in.

However, it's important to understand how property taxes work in this state to maximize your investment.

Fortunately, this guide includes all the information you need to know your tax obligations!

Remember that you can contact a tax professional if you still have questions about the Mississippi tax system!

If you're looking for more tips on property management accounting, check out our whitepaper on the best tips for simplifying this complex process.