Does Mississippi have a real estate transfer tax?
No. Mississippi law imposes no deed tax, documentary stamp tax or realty transfer fee on the sale of real estate, and Mississippi counties and cities don’t levy one either. A seller of a $2,000,000 or $20,000,000 apartment building pays the same transfer tax: nothing.
That puts Mississippi in a small group of states. Most states tax the deed in some form, and every state that borders Mississippi except Louisiana charges a statewide rate. For sellers, the absence of a transfer tax is a clean saving on the settlement statement.
It also changes how deals get structured. In states with a transfer tax, owners spend real effort on entity sales, assumed loans and timing to shave the bill. In Mississippi, you can pick the structure that works best for income tax, financing and liability without a transfer tax pulling the decision in another direction. A deed sale and an LLC interest sale cost the same at the courthouse.
What Mississippi charges instead: recording fees
The government cost of recording a Mississippi deed is a flat fee per instrument, not a percentage of the price. Under Mississippi Code section 25-7-9, as revised effective January 1, 2020, chancery clerks charge $25 per instrument, or $26 in counties that collect the archive fee, and that covers indexing the first five pages. Each page after five is $1.
The DeSoto County and Harrison County chancery clerks both list $26 for a warranty deed of up to five pages. A typical deed for an apartment sale is well within that, so recording costs stay at a few dozen dollars no matter the price.
The deed is recorded in the chancery clerk’s office of the county where the property lies. Your closing attorney or title company handles the filing and lists the fee on the settlement statement.
Who pays closing costs on a Mississippi apartment sale?
Without a transfer tax, the question of who pays shifts to the other costs. Those are set by your purchase contract rather than by statute. In a typical Mississippi commercial sale, the seller pays to deliver clear title, which can include the payoff of existing loans, release recording fees and the cost of curing title problems. The buyer often pays for its own lender, survey and inspections.
Owner’s title insurance, attorney fees and recording costs are negotiable, and practice varies by market. Read the closing cost section of the contract before you sign, since in Mississippi that is where the real money in closing costs is decided.
LLC transfers, gifts, foreclosures and 1031 exchanges
With no transfer tax, there is nothing to exempt. That simplifies a lot of planning that sellers in other states have to think through carefully:
- Deeding a building into an LLC you own, or back out of it, costs only the recording fee.
- Selling the membership interests of an LLC that owns the building triggers no transfer tax, because Mississippi has none to apply to controlling-interest sales.
- Gifts, transfers to heirs and deeds from an estate pay only recording fees.
- Foreclosure deeds and deeds in lieu of foreclosure owe no transfer tax.
- A 1031 exchange sale owes no transfer tax, though your replacement purchase may owe one if it is in another state.
Worked example: a $2M and $5M Mississippi apartment sale
Take a 32-unit building in Jackson sold for $2,000,000 with a two-page deed. Mississippi transfer tax is $0. The deed recording fee is $25 or $26 depending on whether the county collects the archive fee. The seller’s other costs, such as the loan payoff and title charges, depend on the contract and the property.
Now compare the same price across the state line. In Alabama, the deed tax is 50 cents per $500, or $2,000. In Arkansas, $3.30 per $1,000 comes to $6,600. In Tennessee, 37 cents per $100 comes to $7,400, and the statute puts it on the buyer.
At $5,000,000, Mississippi is still $0, while Alabama would charge $5,000, Arkansas $16,500 and Tennessee $18,500. A buyer comparing a Southaven building with one across the line in Memphis can afford a little more for the Mississippi property, because none of that money goes to transfer tax.
| Sale price | Mississippi | Alabama (0.1%) | Arkansas (0.33%) | Tennessee (0.37%) |
|---|---|---|---|---|
| $2,000,000 | $0 | $2,000 | $6,600 | $7,400 |
| $5,000,000 | $0 | $5,000 | $16,500 | $18,500 |
Mississippi compared with neighboring states
Every neighbor except Louisiana has a statewide transfer tax, and the rules on who pays differ. Alabama’s deed tax under section 40-22-1 is 50 cents per $500 of value. Arkansas charges $1.10 per $1,000 plus an additional $2.20 per $1,000 that the statute assigns to the purchaser, for $3.30 in total. Tennessee’s 37 cents per $100 is paid by the grantee.
For a Mississippi seller in a 1031 exchange, this matters on the buy side. If your replacement property is in Tennessee, the 0.37% is your cost as the buyer. On a $5,000,000 Memphis or Nashville building, that is $18,500 of exchange cash that doesn’t go into equity.
| State | Rate | Who pays under the statute |
|---|---|---|
| Mississippi | None | n/a |
| Alabama | $0.50 per $500 (0.1%) | Not specified in § 40-22-1 |
| Arkansas | $3.30 per $1,000 (0.33%) | Purchaser pays the $2.20 portion |
| Tennessee | $0.37 per $100 (0.37%) | Grantee (buyer) |
Why sellers still care: property tax after the sale
A transfer tax is a one-time cost, and Mississippi skips it. Property tax is the cost a buyer will pay every year, and it shapes the price. Under Mississippi Code section 27-35-4, Class I property is assessed at 10% of true value and Class II at 15%. The Department of Revenue defines Class I as single-family, owner-occupied residential property and Class II as all other real property, so an apartment building is assessed at 15%.
A buyer will ask what happens to the assessment after closing. If your building carries a true value of $1,400,000 on the county roll, its assessed value is $210,000. A buyer paying $2,000,000 will underwrite the risk that the assessor moves toward the sale price, which at 15% would mean $300,000 of assessed value. Share your recent tax bills early so the buyer doesn’t guess high.
Income taxes on a Mississippi sale
The larger taxes on a Mississippi sale are income taxes. Federal capital gains tax, depreciation recapture at up to 25% on the unrecaptured portion and, for many owners, the 3.8% net investment income tax apply as in any state.
Mississippi taxes the gain as income. According to the Department of Revenue, the rate is 4% on taxable income above $10,000 for 2026, falling to 3.75% for 2027. On an $800,000 gain that is about $31,600 if it were your only taxable income. A 1031 exchange can defer both the federal and Mississippi tax, and seller financing can spread the gain across the years you collect principal.
Where the money actually goes at a Mississippi closing
With no transfer tax, a Mississippi seller’s settlement statement is shorter than in most states. The large lines are the loan payoff, any prepayment penalty or defeasance cost on that loan, title charges, attorney fees and prorations. On a commercial loan with yield maintenance, the prepayment line can dwarf every other cost combined, so ask your lender for a payoff quote early.
Prorations deserve attention on an apartment building. Rent collected for the month of closing, tenant security deposits and the current year’s property tax are usually split or credited between seller and buyer. Get these right on the draft statement and the closing goes smoothly.
- Request a payoff letter that shows any prepayment penalty.
- Pull a current rent roll and a list of security deposits by unit.
- Gather the last two years of property tax bills for the parcels.
- Confirm the deed will be a single instrument within five pages, which keeps recording at the flat fee.
Selling your Mississippi apartment building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units across Mississippi, including Jackson, the Gulf Coast, Hattiesburg, Southaven and Oxford. We buy directly, can offer seller-carry terms, and can work inside a 1031 timeline.
Send the address and unit count through the form on this page, or call (469) 660-2977. We typically respond within 48 hours, and we’ll lay out your payoff, title and recording costs so you can see your net before you sign. If you are planning an exchange into another state, tell us where, and we’ll factor that state’s transfer tax into the timing conversation.
