Effective rate, median annual bill, homestead exemption, and assessment cap rules under Ark. Const. amend. 79
Median bill is the actual ACS 2022 figure for owner-occupied housing units in Arkansas. Your specific bill will vary by county and municipality, local mill rates can swing the effective rate by 30%+ within a single state.
Arkansas is a genuinely low-property-tax state, which is one reason its rental math often pencils out where higher-tax markets don't. The Tax Foundation puts Arkansas's effective property tax rate on owner-occupied housing at 0.56% for 2026, among the lowest in the country. But the headline rate is the homeowner story. As a landlord, you sit in a different lane: your property is non-homestead, which changes how fast your assessed value can climb and which relief programs you can claim. This page breaks down what Arkansas actually taxes on a rental, how the 20% assessment ratio works, and where Amendment 79 helps you and where it doesn't.
Arkansas assesses all real property, including rentals, at 20% of appraised (market) value. That ratio is statewide and applies the same to a rental house, a fourplex, and an owner's primary home. So a rental appraised at $200,000 has an assessed value of $40,000, and your tax bill is that $40,000 multiplied by the local millage rate set by your county, city, and school district.
Millage is where the real variation lives. Arkansas has no single statewide rate; each county and school district levies its own, so the effective burden on an identical building can differ meaningfully between, say, a Little Rock parcel and a rural county. The 0.56% statewide effective figure from the Tax Foundation is a useful ceiling-level benchmark, but your actual number depends entirely on the millage in your parcel's taxing districts. Pull the specific millage from your county assessor before you underwrite a deal.
Amendment 79 to the Arkansas Constitution limits how fast taxable assessed value can rise after a county reappraisal. The split matters to landlords: a homestead (an owner-occupied principal residence) is capped at a 5% per year increase, while all other real property, which includes rentals, commercial, agricultural, and vacant land, is capped at 10% per year until the parcel reaches its full assessed value.
The practical effect: after a reappraisal jump, your rental's taxable value can climb twice as fast as an owner-occupant's next door, but it still can't spike overnight. In a hot appreciation market, the 10% cap gives you a predictable, phased ramp rather than a single-year shock, which is genuinely useful for multi-year cash-flow modeling. In a flat market it may never bind at all.
This is the line item that separates owner-occupants from investors. Arkansas grants a homestead property tax credit, currently $500 and rising to up to $600 beginning with 2026 tax bills, but it applies only to a person's principal place of residence. A rental you don't live in does not qualify. You get no homestead credit on it.
The same logic applies to the senior/disabled assessed-value freeze under Amendment 79: it locks the assessed value of a qualifying owner's homestead only. Rental parcels are excluded, even if the owner is a senior. So on an investment property you pay tax on the full assessed value with no credit subtracted, while the house next door may be shaving $500-$600 off its bill and freezing its assessment. Build that gap into your comparison when you evaluate a would-be-rental against what an owner-occupant would pay.
Property tax is a fixed carrying cost that comes out of net operating income before you ever touch the mortgage. Arkansas's low effective rate is a real advantage: at roughly half a percent of value in many districts, the drag on cash flow is modest compared with high-tax states where property tax alone can consume a month or more of rent per year.
Two adjustments keep your numbers honest. First, budget without the homestead credit, since your rental won't get it. Second, when you buy, expect the assessed value to reset toward market and then step up under the 10% cap, so don't anchor your pro forma to the prior owner's tax bill if they had it as a homestead or held it through years of capped increases. Separately, note the federal 30% rule of thumb, that housing costs at or under 30% of a tenant's gross income are considered affordable. That's a national HUD benchmark for setting rent, not an Arkansas tax rule, but it bounds how much rent your local market can actually bear to absorb rising carrying costs.
$425 credit on real property taxes for primary residence (Amendment 79). Annual reassessment capped at 5%.
The exemption is granted under Ark. Const. amend. 79. To claim it, owner-occupants must typically file an application with the county assessor (most states require filing once, with renewal triggered only by change of ownership or use). Failure to file the application means full taxation at the non-homestead rate.
Figures on this page are drawn from the Arkansas Constitution (Amendment 79), the Arkansas Department of Finance and Administration's Assessment Coordination Division, county assessor and treasurer offices, and the Tax Foundation's 2026 Arkansas rankings. Assessment ratios and reappraisal caps are constitutional and statewide; millage rates are set locally and change annually, so verify your parcel's current rate and any pending millage with your county assessor before relying on it for underwriting. The homestead credit increase to $600 takes effect with 2026 tax bills.
There's no single statewide rate. Arkansas assesses rental property at 20% of market value, then applies your county, city, and school district millage. The Tax Foundation's statewide effective rate on owner-occupied housing is 0.56% for 2026, a useful benchmark, but your actual rate depends on local millage. Confirm the exact figure with your county assessor.
No. The homestead property tax credit (currently $500, rising to up to $600 for 2026 tax bills) applies only to an owner's principal place of residence. A property you rent out and don't live in does not qualify.
Under Amendment 79, non-homestead real property, which includes rentals, is capped at a 10% increase in taxable assessed value per year after a reappraisal, until it reaches full assessed value. Owner-occupied homesteads are capped at 5% per year.
Take the appraised market value, multiply by the 20% assessment ratio to get assessed value, then multiply by the total local millage rate for your taxing districts. No homestead credit is subtracted on a rental.
No. The Amendment 79 assessed-value freeze for qualifying senior and disabled owners applies only to their homestead (principal residence). Rental and other non-homestead parcels are not frozen, even if the owner qualifies for the freeze on their own home.
Yes, relatively. Arkansas's effective property tax rate is among the lowest nationally at 0.56% on owner-occupied housing (Tax Foundation, 2026), so property tax is a comparatively small carrying cost. The catch for investors is that rentals miss the homestead credit and freeze, and face the 10% rather than 5% reappraisal cap.
Effective rate source: Tax Foundation analysis of Census ACS 2022 (published 2024). Statutory citation: Ark. Const. amend. 79. Last updated July 14, 2026. For informational purposes only, not tax or legal advice. Consult a CPA or tax attorney for your specific situation.
