Arkansas Property Tax: Rates, Homestead Credit, and Amendment 79

Property taxes in Arkansas are not the highest in the country — far from it — but the way they're calculated is genuinely confusing for first-time buyers. Arkansas uses a fractional assessment system, applies millage rates that vary by county and school district, and offers two distinct forms of relief for owner-occupants that many new homeowners either miss entirely or don't claim until years after moving in. If you're buying a home in Arkansas, understanding this system before closing means you can budget accurately and make sure you're not leaving money on the table.

How Arkansas Property Tax Is Actually Calculated

Arkansas does not assess property at its full market value for tax purposes. Property is assessed at 20% of its estimated market value. This is called the assessed value, and it's the number your tax bill is actually based on.

From there, the county applies a millage rate — the number of dollars of tax per $1,000 of assessed value. Millage rates vary significantly by county and are further broken down by purpose: county government, school district, city services, and special improvement districts each levy their own millage. Total millage rates for Arkansas counties typically range from about 40 to 60 mills, though some urban school districts sit higher.

Example calculation for a $250,000 home in a county with 50 mills total:

1. Market value: $250,000
2. Assessed value (20%): $50,000
3. Annual tax at 50 mills: $50,000 × 0.050 = $2,500
4. After homestead credit (see below): $2,500 − $375 = $2,125

The fractional assessment structure is why Arkansas property tax bills look low to people moving from states that assess at full market value. A $250,000 home is taxed as though it's worth $50,000 — that's not an error.

The Arkansas Homestead Tax Credit

Any Arkansas resident who owns and occupies their home as a primary residence is eligible for the homestead property tax credit. The credit reduces your annual property tax bill by $375.

This is a credit against the amount owed — not a deduction from assessed value — so it directly reduces your tax payment dollar-for-dollar. On a property with a $2,500 annual tax bill, the credit brings it to $2,125.

The $375 figure is fixed in state law and applies uniformly regardless of county, assessed value, or income.

How to File for the Homestead Credit in Arkansas

You claim the homestead credit by filing with your county assessor's office, not with the state Department of Finance and Administration. The process varies slightly by county but generally requires:

1. Filing a homestead application form with the county assessor — available at the assessor's office or often on the county website
2. Documentation of ownership and occupancy: your deed plus a matching driver's license, voter registration, or vehicle registration showing the property address
3. Filing by October 15 of the tax year to receive the credit for that year's taxes

In most counties, once you establish homestead status, it carries forward automatically in subsequent years as long as you continue to own and occupy the property. You only need to re-file if you move, change the property's use, or the assessor requests re-verification.

If you close on your home in the spring and miss the October 15 deadline, you'll receive the credit starting the following tax year. It doesn't apply retroactively to prior years. This is one of the first administrative tasks worth handling after closing — the filing takes about 10 minutes.

Some counties have implemented online filing or accept submissions by mail; others require an in-person visit. Contact your county assessor directly to confirm the process in your county.

Amendment 79: The Assessment Cap That Protects Homeowners

Arkansas Amendment 79, passed by voters in 2000, imposed two important constitutional limits on how quickly property assessments can increase.

For homestead property (owner-occupied primary residences): Property value assessments cannot increase by more than 5% in any single year.

For non-homestead property (investment properties, commercial, second homes): Assessments cannot increase by more than 10% in any single year.

This protection matters most in appreciating markets. Without it, a county assessor could theoretically reassess your home by 40% in a single year — tripling your tax bill overnight. Amendment 79 puts a ceiling on that, ensuring that even in a hot real estate market, the assessed value (and by extension your tax bill) can only creep up incrementally.

How the Cap Actually Works

The Amendment 79 cap applies to the assessed value at the time of each annual reappraisal, not to the millage rate. County governments can still raise or lower millage rates through their regular budget process — the cap only constrains the assessment side of the equation.

When you buy a home, the county assessor will typically reappraise the property based on the sale price. This can reset the assessed value to market levels, which may be higher than what the previous owner was paying under years of Amendment 79 protection. Buyers sometimes assume they'll pay taxes based on the prior owner's assessment — but the purchase transaction itself can trigger a new appraisal.

After the initial reappraisal at purchase, Amendment 79's 5% annual cap then applies going forward for as long as you own and occupy the property as your homestead.

Comparing Effective Property Tax Rates Across Arkansas

Because millage rates vary by county and school district, effective property tax rates differ meaningfully across the state. Generally:

• Urban counties with strong school districts (Pulaski, Benton, Washington) tend to have higher combined millage rates, reflecting greater school district levies
• Rural counties often have lower total millage but may still carry meaningful combined rates depending on local government structure
• Special improvement districts — common in planned communities, flood control areas, and some suburban developments — add levies on top of base county and school rates

To calculate your expected property tax for a specific property, ask your real estate agent or the county assessor's office for the current total millage rate for that parcel's address. Your lender will also request the current tax bill as part of the mortgage application process to set up your escrow account.

Property Tax Exemptions for Special Circumstances

Beyond the homestead credit, Arkansas offers additional property tax relief for specific populations:

Disabled veterans: Veterans with a 100% service-connected disability rating are eligible for a full property tax exemption on their homestead under Arkansas law. This is applied through the county assessor and requires documentation of VA disability rating.

Surviving spouses of military members: Surviving spouses of service members killed in action may also qualify for exemption under certain conditions.

Disabled residents: Certain residents with disabilities may qualify for additional relief programs at the county level.

These exemptions require separate applications at the county assessor's office and have their own documentation requirements.

What Property Tax Looks Like at Closing

When you close on a home mid-year in Arkansas, property taxes are typically prorated between the buyer and seller based on the closing date. Arkansas taxes are paid in arrears — the tax bill due in the current year covers the prior year — which affects how the proration is structured. Your closing attorney will calculate the proration based on the current assessed value and millage rate.

After closing, your mortgage servicer will collect monthly property tax escrow payments as part of your PITI payment and pay the annual tax bill when it comes due. Your servicer will set the escrow amount based on the lender's estimate of your annual taxes — verify this against the actual assessed value and county millage rate, since servicer estimates can sometimes overshoot.

For a complete guide to buying your first home in Arkansas — including how to calculate your estimated property taxes by county, a closing checklist, and guidance on ADFA down payment assistance — see the Arkansas First-Time Home Buyer Guide.

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