While many people move here during their retirement years, Arkansas offers a low cost of living and a great quality of life. In addition to all the outdoor activities you can enjoy in the Natural State, it also has a thriving art scene and many economic opportunities. While retirees receive significant tax benefits, Arkansas residents also pay one of the lowest property tax rates in the country. Here’s a brief overview to help you find the lowest property taxes in Arkansas.
A Snapshot of Arkansas’ Property Taxes
There’s no way around them, taxes are simply a part of life. Each year, the Country Assessor estimates the value of your home and then determines how much you owe in property taxes. The taxes that property owners pay fund important public services such as education, public safety, and the construction and maintenance of infrastructure. Although local governments each set their own taxation rates, Arkansas has the 5th lowest rate in the entire country.
As you would expect, residents in urban areas pay higher property taxes. However, the average resident paid $532 in property taxes for 2020. This figure is based on the state’s median home value which is $102,900, or 0.52% of the assessed fair market value. With an average income of $48,177 per household, residents pay 1.1% of their annual salary in property taxes.
Property Taxes by County in Arkansas
Arkansas is known for its parks and wilderness reserves, hence the name, the Natural State. Due to the geography and rugged terrain, it has a large rural population. There are slightly more than 3 million residents spread across 75 counties. However, the highest population concentrations are around Bentonville and Little Rock. Coincidentally, they also have the highest property taxes.
The exact taxation rates are determined by county and vary across the state. Benton County levies the highest taxes (0.6% of median home value) totaling about $929. Neighboring Washington County is only slightly lower with a rate of 0.59% or $909 annually. Similarly, Pulaski County, which is home to the state capital, has the highest actual rate (0.68%) which averages about $915 per year.
Lowest Property Taxes in Arkansas
Most counties outside of the large urban centers have reasonably low property taxes. The lowest property taxes in Arkansas are in the more rural and agricultural regions in the southern and eastern parts of the state. While it boasts one of the lowest rates in the United States, some counties are significantly lower year after year.
The three counties with the lowest taxes are all home to wildlife refuges and national forests. Calhoun County has the lowest property taxes in Arkansas. As the least populated county, it also levied the fewest taxes. Each household averaged $275, which translates to 0.53% of the median home value. Lee County residents only paid a little more at $286. Desha County, which borders the Mississippi River and the White River south of Lee County, collected an average of$322 or 0.58% in property taxes for 2020.
Property Tax Breaks
Like many other states, Arkansas offers special exemptions to senior citizens, the disabled, veterans, and their eligible dependents. One exemption that anyone over 65 should be aware of is the tax exemption for seniors. On your 65th birthday, the taxable assessed value of your home freezes. Likewise, the property value for homeowners with disabilities begins from the date when it occurred. The exemption also extends to their dependent children and widow(er) as long as they don’t remarry.
The Homestead Tax Credit
Another property tax break Arkansas residents can claim is the Homestead Tax Credit. It provides up to $375 every year for those who qualify. In order to claim the credit:
- you must be owner,
- be the buyer under the recorded sales agreement, or
- occupy the property as your primary residence.
There is no designated age to claim the tax credit. The property could be owned by a revocable or irrevocable trust. And, there are still ways to qualify once ownership and primary residence change. You can still claim it if you are the owner but reside in an assisted living facility, or deeded the home to someone else while you continue to use it as your principal residence. However, you must apply for the Homestead Tax Credit through the County Assessor’s office. And, you can continue to claim it every year you are eligible.
In addition to the eligibility requirements, there are other factors that could affect the total assessed value. If you have substantial improvements to the property including renovations, reconstruction, or refurbishment that increases the property value by at least 25%, it will also increase the amount that was “frozen.” But, Amendment 79 also limits how much the local government can increase the assessed value of a property from year to year. They can only increase homestead properties 5% per year until it reaches the full value. Meanwhile, commercial, agricultural, or vacant properties can only rise 10% per year. However, these caps don’t apply when there have been “substantial improvements.”
Appeals to the County Assessor’s Office
Arkansas residents have the right to appeal every year if they feel their property valuation is too high. If you believe the amount is incorrect, start by combing through tax records and create an itemized list of the features and details of the property. Should you find inaccuracies or mistakes, it would give you grounds for an appeal. However, you can only appeal the assessed value, not the taxes charged.
After you choose to make an appeal, the next step is to contact the reappraisal board. Discuss your concerns with someone in the appraiser’s office and look for errors in the valuation process. Unfortunately, these meetings don’t always lead to a satisfactory solution. So, you may need to make a formal appeal in person or send a letter of petition to the Board of Equalization. They even provide a guide to help you write your petition and make sure you include all vital information. You will then receive a date for the hearing with a judge. But, if you disagree with their decision, you can appeal it all the way up to the state supreme court.
If you have any specific questions or concerns about property taxes, it is always best to seek legal counsel. They can inform you of your rights and help you minimize your property tax bill to keep more of your hard-earned money.
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