July 16, 2022

Cost of Living If You Retire in Mississippi

Homestead Exemption, Mississippi, Retirement Communities, Zillow

Mississippi, with its friendly people, slower pace of life, and mild winters, plus the fact that the state has one the lowest costs of living in the country, make it an attractive place to retire. According to Visit Mississippi, the state has 21 retirement communities that have passed a certification process based on standards that include low taxes and affordable cost of living, quality medical care, recreation, educational and cultural opportunities, and low crime rate.

Home prices

Home prices in Mississippi are generally quite low compared to other parts of the country, but vary by location. According toZillow.com, the median price of a home in Mississippi overall in June 2010 was $155,000. The median price in Hattiesburg, one of the certified retirement communities, was $167,500. In Oxford, a small town that is the home of the University of Mississippi, the median price was $192,900. On the
Gulf Coast, the median price was $149,900 in Gulfport. And in historic Vicksburg, the median price was $142,000.

Mississippi property taxes

According to theTax Foundation, property taxes in Mississippi ranked 46th in the country in 2008 as a percentage of median home value, at 0.47%. Property taxes on residential property in Mississippi are assessed at 10% of the true value times the applicable millage rate. For example, if you have a home with a true market value of $150,000, the assessed value would be $15,000. At a millage rate of 100, your annual property taxes would be $1,500. You can find summary tables of the city and county millage rates on the Mississippi Tax Commission website. If you are 65 or older or totally disabled and are eligible for a homestead exemption, you are exempt from property tax on the first $75,000 of the true value of your home.

Mississippi Income Tax

Mississippi has a state income tax with a rate of 3% on the first $5,000 of taxable income, up to 5% on taxable income over $10,000. The personal exemption is $6,000 for single status and $12,000 for married filing jointly. If you are 65 or older, you can claim an additional $1,500 exemption. For Mississippi state income tax purposes you can either itemize deductions or claim the standard deduction, which for 2009 was $2,300 for single status, $3,400 for head of family, and $4,600 for married filing jointly or for surviving spouse.

Social Security, Railroad Retirement and Veterans’ Administration retirement benefits are not subject to Mississippi state income tax. Other retirement income, pensions and annuities are also excluded from state tax. But early distributions from retirement plans would not be considered retirement income and may be subject to income tax in Mississippi.

Sales taxes in Mississippi

Mississippi has a 7% state sales tax, and county and city sales taxes can add an additional 3% to the overall rate. Residential utilities, prescription drugs, healthcare services and payments made by Medicare and Medicaid are exempt from sales tax.

Sources:
Individual Income Tax – Mississippi Tax Commission
Property Taxes on Owner-Occupied Housing by State, 2004 – 2008 – Tax Foundation
Mississippi Home Prices and Home Values – Zillow.com
Property Tax – Mississippi Tax Commission
Retire in Mississippi – Visit Mississippi