News Room
News Room

Main Site Content

Facts on the Mortgage Interest and Real Estate Tax Deductions in Mississippi

Facts on the Mortgage Interest and Real Estate Tax Deductions in Mississippi

October 5, 2017

 

Of the approximately 742,000 owner-occupied houses in Mississippi in 2014, 379,000 or 51% had a mortgage.

In 2014, 189,200 taxpayers in Mississippi claimed a deduction for mortgage interest (MID). The total amount deducted was $1,225,457,000. This means that the average taxpayer claiming the MID subtracted $6,500 from taxable income in 2014 as a result of the MID.

At a marginal rate of 25 percent1, this means that the average taxpayer saved $1,620 in taxes as a result of the MID. The total tax savings from the MID in Mississippi in 2014 was $306,364,250.

In 2014, 219,300 taxpayers in Mississippi claimed a deduction for real estate taxes. The total amount deducted was $437,877,000. This means that the average taxpayer claiming the real estate tax deduction subtracted $2,000 from taxable income in 2014.

At a marginal rate of 25 percent2, this means that the average taxpayer saved $ 500 in taxes as a result of the real estate tax deduction. The total savings from the real estate tax deduction in Mississippi in 2014 was $109,469,250.

If the MID and real estate tax deductions were eliminated, the loss would not be a one-year event; homeowners lose out on these potential savings each and every year. The present value of these lost savings could total $10,662,397,400.

The value of all owner-occupied real estate in Mississippi in 2014 was $98,733,446,600. If the lost tax savings are fully capitalized into the price of houses, the average decline in value in Mississippi could be 11%. From the individual perspective, the median priced home in Mississippi in 2014 was $153,400. A decline in value as projected could mean a loss in home value of $16,550 for the typical home owner.

1 Marginal rates range from 10 to 35 percent.
2 Ibid.
3 Present value calculation assumes 3.9 percent discount rate and 1000 year time horizon.

Sources for the data above include: Internal Revenue Service 2014, American Community Survey 2014, National Association of Realtors® 2014; All calculations are by the National Association of Realtors® Research Division, July 2017.

To learn more, visit nar.realtor