Mississippi taxes capital gains at 4.7%. Combined with federal taxes, your effective rate on a home sale could reach 23.5%.
MS State Rate
4.7%
Flat tax (2026)
Federal Rate
15%
Most common long-term bracket
Combined Effective
23.5%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If Mississippi is where your primary residence is located and you've lived there at least 2 of the last 5 years, you can exclude up to $250K (single) or $500K (married filing jointly) of your capital gain from both federal and state taxes.
Investment and rental properties in Mississippi don't qualify for the exclusion. You'll owe 4.7% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In Mississippi, homes sold in February sell for 6% more than those sold in October (-7%). Timing your sale right can offset a significant portion of your tax bill.
Capital gains tax rates on home sales in Mississippi and nearby states.
| State | Rate | Tax on $150K Gain | Notes |
|---|---|---|---|
| 0% | $0 | No state income tax | |
| 4.25% | $6,375 | Top marginal rate (2026) | |
| 4.4% | $6,600 | Top marginal rate | |
MississippiYou | 4.7% | $7,050 | Flat tax (2026) |
| 5% | $7,500 | Taxed as ordinary income |
Selling in Tennessee instead of Mississippi would save $7,050 in state tax on a $150K gain.
Mississippi has moved to a flat 4.7% tax rate for 2026. Capital gains are taxed as ordinary income.
The state's low median home price ($170K) means most primary residence sellers have gains well within the federal exclusion.
Jackson, the Gulf Coast, and DeSoto County (Memphis suburbs) drive most market activity.
Investment property sellers face the full 4.7% rate. The state's affordable prices make rental investment popular with out-of-state investors.
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