Counties and municipalities levy a property tax on real and tangible personal property. Owner-occupied residential properties are assessed at a percentage of true value. Property is appraised and assessed by local assessors. Depreciation is allowed in determining true value. Tax rates are set by each city and the county based on local budget requirements. Mississippi does not have a state property tax.
Generally, the term real property refers to land. Land, in its general usage, includes not only the face of the earth, but also everything of a permanent nature over or under it. This includes structures and minerals.
Property tax questions you should to ask
- What is the assessed value of the property? Note that assessed value is generally less than market value. Ask to see a recent copy of the seller’s tax bill to help you determine this information.
- How often are properties reassessed, and when was the last assessment completed? Generally, taxes increase most significantly when a property is reassessed.
- Will the sale of the property trigger a tax increase? Often the assessed value of the property increases based on the amount you pay for the property. Moreover, in some areas, taxes may be frozen until resale.
- Is the amount of taxes paid comparable to other properties in the area? If not, it might be possible to appeal the tax assessment and lower the rate.
- Does the current tax bill reflect any special exemptions for which you may not qualify? For example, many tax districts offer reductions for those over 65 or with special circumstances.
- Was homestead exemption filed for by the seller during the current year? If yes, this could affect the amount of tax you as the buyer would pay in the first year of ownership.
You can contact the Tax Collector’s Office in the county in which you are purchasing property or you may talk with your REALTOR® for information about the tax on the property that you are considering.
Portions of this article reprinted from REALTOR® Magazine Online by permission of the National Association of REALTORS®. Copyright 2008. All rights reserved.