Are you considering a move to Arkansas? If so, you’ll need to familiarize yourself with the state’s property tax system. Property taxes are an important source of revenue in the state.

They play a large role in funding local services such as schools and public safety. Understanding how these taxes work will help ensure that you can plan for them properly. Will also make sure that your finances stay on track.

In this blog post, we will explain what property taxes are, how they’re calculated in Arkansas. Who pays them, when they’re due, and what happens if they aren't paid.

We’ll also discuss exemptions and deferrals available for certain individuals. As well as the appeals process for those who don't agree with their assessment or tax bill. By the end of this guide, you should have a thorough understanding of property taxes in Arkansas!

What are property taxes and what do they fund in Arkansas?

Property taxes collected by local governments on real estate owned within their jurisdiction. In Arkansas, counties collect these taxes. The taxes which then go toward funding public services.

Such as schools, road maintenance, libraries, parks and recreation programs. Police and Fire departments also received their funding through property taxes.

How Are Property Taxes Calculated in Arkansas?

In Arkansas, property taxes are based on the market value of a person's property. People who work for the county go around and check how much a person's property is worth. This is called an appraisal. The property must be worth what someone would pay for it if they wanted to buy it. But, the taxes you pay are not based on the appraisal. They are based on 20% of the appraisal, this is the assessed level.

For example, if your house is worth $200,000, the taxes you pay will be based on $40,000 (20% of $200,000). Once the assessed value is established it will be multiplied by the millage rate for that area. A mill is equal to $1 per $1,000 of the assessed value.

Using the above example the 2021 Millage Rate for Fayetteville was 57.95. To compute the taxes $40,000 * .05795= $2,318.

Who Pays Property Taxes in Arkansas & How Do I File for Tax Exemptions?

All property owners are required to pay property taxes each year. Yet, certain individuals may qualify for exemptions. Exemptions are available to qualifying disabled veterans. 

If you are a veteran who is permanently and completely disabled because of your service, or if you are the widow of a veteran who is receiving benefits, you may be able to get a special exemption on your property taxes. This applies to real estate and personal property taxes. It's important to check if you qualify for this by contacting your local assessor.

 When Are Property Taxes Due In Arkansas & Can I Pay Them In Installments Throughout The Year Instead Of All At Once Come Tax Time?

Property taxes are usually due on October 15th each year although certain counties may differ slightly.  Tax rolls open in late March early April and partial payments can be made at that time.  Make sure to check with your local assessor before doing so just to make sure everything is compliant on both ends.

Can I freeze my property taxes in Arkansas?

 The Freeze does not freeze your taxes, it freezes your Taxable Value. When you reach the age of 65 (or if you are older) you qualify for a Freeze. This also applies if you are on Social Security Disability. Simply supply us with a copy of your driver’s license or birth certificate for verification of age. If you are disabled, a copy of your Medicare card or Award letter from Social Security will work as verification. You will not lose the Freeze unless you add on to your home. At that point the Freeze will be removed and reapplied at the new value. The taxable value will be frozen but if the millage rate changes your taxes can also change.

 What Happens If I Don't Pay My Property Taxes In Arkansas?

Properties with delinquent taxes will be sold at auction. Properties that remain delinquent for one year past the due date are certified to the Arkansas Commissioner of State Lands (“the Commissioner”).  This essentially transfers title to the property to the State. It gives  the Commissioner authority to sell the property to collect the tax on behalf of the county or conduct a sale of the property. Tax delinquent lands are not sold at the county level.  Thousands of properties are sold at the state level each year.

What is the homestead tax credit in Arkansas?

 The Homestead Property Tax Credit that can help lower the amount of taxes you have to pay on your home.  The credit can be up to $375. To qualify, the house must be where you live most of the time. You can't get this credit more than once a year.

  To get the credit, the house must be where the person paying taxes lives most of the time. The person can be the owner of the house, someone who is buying the house, someone who has a special kind of ownership called a life estate, or someone who owns the house through a trust. If you meet these requirements, you can find more information about the credit by contacting the local assessor.

Don't let property taxes stress you out when buying or selling a property. Contact us today and let our experienced real estate agents guide you through the process and help you find the perfect property at the right price. Contact us today to schedule a consultation and learn more about your property tax options.

Written by Tim Moldenhauer January 22, 2023