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South Carolina Department of Revenue
Homeowner=s
Guide to Property Taxes
in South Carolina
The property tax was created in South Carolina in 1915 and until the late
1920s was the major source for state and local revenue. Today, property tax represents
about 20 percent of all state and local taxes. It continues to be a main source of revenue
for our state=s public schools.
Why do we pay property tax?
Property tax is collected by local governments to provide for the many
services most of us take for granted. Schools, police and fire protection and public
libraries are possible because of revenue from the property tax. We are all asked to pay
our fair share of the cost of these services by paying tax in proportion to the value of
our property.
Definitions of common property tax terms
Real Property - All land and the buildings, structures or
improvements on that land
Personal Property - All things other than real estate which have
value such as cars, trucks, boats, motorcycles and airplanes, and items used in a business
such as furniture, fixtures and equipment
Fair Market Value - The amount for which property can reasonably be
expected to sell on the open market with a willing buyer and a willing seller
Assessment Ratio - The percentage of your property =s
value which is subject to taxation. For example, the assessment ratio of residential
property is 4%. Multiply your home=s fair market value by the assessment ratio of 4% to
determine assessed value.
Assessed Value - An appraisal or fair market value of real or
personal property multiplied by the appropriate corresponding ratio equals the assessment
or assessed value. Assessed value times the millage rate equals the amount of property tax
due.
Reassessment - Process required by state law to determine the
change in market value of property over a certain period of time in order to provide
equity among taxpayers. Reassessment is a revaluation of real estate.
Millage Rate - The amount of mills levied in order to meet the
budget of a school district, county, city or other political subdivision. One mill equals
1/1000 of a dollar or 1/10 of a cent. If the tax rate is 256 mills, multiply .256 by the
assessed value to determine the amount of property tax due.
Tax Year - The year that the tax bill is received payable by
January 15 of the next year
How is the value of my property determined?
The county assessor maintains information on each property located in the
county, including size, square footage, location and certain amenities. The assessor also
has copies of building permits which provide additional information on the property.
To find the value of any piece of property, the assessor must know the
price properties similar to it are selling, what it would cost today to replace, how much
it takes to operate and repair, what rent the property may earn, and other facts affecting
its value, such as the current rate of interest charged for borrowing the money to buy or
build properties.
Along with this information, the assessor will determine the property =s
value considering three different approaches:
$ Sales Comparison Approach - This method compares
property to others which have sold recently. These prices are analyzed to determine if the
sales were accurate. One property may have sold for more than it is really worth because
the buyer was in a hurry and was willing to pay any price. Another may have sold for less
money than it was actually worth because the owner needed cash quickly.
When using the sales comparison approach, the assessor analyzes many sales
to arrive at a fair valuation of your property. Size, quality, condition, location and
time of sale are important facts which are considered.
The sales comparison approach usually is the most reliable way of
determining value of residential property.
$ Cost Approach - A second way to value property is
based on how much money it would take, at current material and labor costs, to replace the
property with one that is similar. If the property is not new, the assessor must also
determine how much it has depreciated. Also, the assessor must determine how much the land
would be worth if it was vacant.
$ Income Approach - Another way to value property is
to evaluate how much income the property would produce if it were rented as an apartment
house, a store or other sort of business. The assessor considers what rent a property may
earn, vacancy rates, operating expenses, maintenance costs, and the current interest rate
charged for borrowing money.
All county assessors receive training in appraisal techniques and must be
licensed or certified by the South Carolina Appraisers Board. It is important to remember
that the assessor does not create value, only the market place can do that. The principle
of supply and demand is the largest single factor in determining a property =s
worth.
How is property taxed?
The property tax is determined by multiplying the fair market value by the
assessment ratio by the millage rate.
For example, the tax on your home is determined in this way:
$50,000 Fair market value of home
x 4% Assessment ratio
= 2,000 Assessed value
x .250 Millage rate (250 mills)
= $500 Taxes due
The South Carolina Constitution provides for the following ratios to be
applied to the market or use value of property to arrive at the assessed value:
Your home (legal residence) 4%
Second home (or any residential property where you do not live) 6%
Agricultural real property (privately owned) 4%
Agricultural real property (corporate owned) 6%
Commercial real property 6%
Manufacturing real and personal property 10.5%
Utility real and personal property 10.5%
Personal property 10.5%
Motor Carriers, Railroads, Airlines and Pipelines real and personal
property 9.5%
How do I get the best tax rate for my home?
If you own a home, you want to be sure to obtain the 4% assessment rate if
you live in the home as your legal residence. Otherwise, your tax rate will be 6%. To
obtain the lower rate, you will need to complete an application with the county assessor.
This should be done as soon as you move into your house, but may be filed anytime before
January 15, when taxes are due. Once you file this application, you will not need to
complete another one, unless ownership changes or use of the property changes.
What is the personal property tax?
Personal property tax is collected annually on motor vehicles,
recreational vehicles, watercraft (includes boats, wave runners, jet skis, etc.) and
airplanes. Personal property tax also applies to equipment, furniture, fixtures and
machinery primarily used by businesses. Household goods in your residence are exempt from
personal property tax.
The value of your motor vehicle is determined by the South Carolina
Department of Revenue using standards and guidelines established by the auto industry. The
Department of Revenue prepares a manual each year for the county auditor to use in
preparing your personal property tax bill. The manual lists each model and make of all
available motor vehicles. The value of your vehicle is multiplied by the assessment ratio
(10.5% or .105) to determine the assessed value of your vehicle. The millage rate is
multiplied by the assessed value of your vehicle to determine the amount of personal
property tax you owe.
Vehicles with unusually high mileage may qualify for a reduced value. Your
county auditor will require you to prove your mileage by showing a vehicle inspection
receipt, by signing an affidavit, by completing an application, by visual inspection or
some other method. In order to receive the high-mileage reduction, you must call or visit
your county auditor =s office no later than the day your personal property
taxes are due.
Personal property taxes on motor vehicles and recreational vehicles must
be paid before your license plates can be renewed. Taxes are due throughout the year on a
staggered monthly schedule. Taxes on watercraft and airplanes are due no later than
January 15 of the following year.
Does the value of my property ever change?
South Carolina =s Constitution requires that property be taxed fairly and
equitably. When similar properties in the same taxing district are taxed differently, the
system is unequal and unfair. From the time your real property first becomes taxable, the
tax assessment does not change unless physical changes have been made or a new
reassessment program is implemented.
The South Carolina Department of Revenue authorizes a reassessment program
to correct such inequities. Only real property values are affected by reassessment. Values
of personal property such as cars, boats and motorcycles are kept current through annual
updates by the Department of Revenue.
If you add a room to your house or make other major improvements, your
property value will increase to reflect the improvements. If your home is damaged, the
value may be reduced.
How often does reassessment occur?
State law requires that counties reassess property every five years.
Counties are on a staggered annual schedule.
How is my property reassessed?
A data collector from the assessor =s
office visits your property and measures the structures to determine square footage. The
data collector also notes other information, such as age, type of construction, type of
heating and air conditioning, number of floors, and whether the structure has a garage,
deck, swimming pool or other amenities.
An appraiser then considers this information along with selling prices of
similar properties in the area, how much it would cost to replace the property at current
costs, and the general physical condition of the property. For rental or commercial
property, an evaluation is made on how much income the property produces, what the
operating expenses are and what kind of investment return can be reasonably expected. The
appraiser also will visit the property to verify the information. With all of this
information, the appraiser then sets the value of your property.
How will I know if my property value changes?
Counties must mail a property tax assessment notice to all property owners
whose property =s fair market value increases by $1,000 or more.
Assessment notices must be sent to the person listed as property owner as of December 31
of the prior year.
The assessment notice is NOT a tax bill. The notice is simply to
notify taxpayers of a change in their property =s value.
Tax bills are mailed usually in October and must be paid by January 15.
The assessment notice includes your market value, the new assessment
value, the assessment ratio, number of acres or lots, location of property, tax map number
and the appeals procedure.
When the reassessment program is completed, counties must mail the
assessment notices by February 1 of the year the reassessment program will be implemented.
If most of the assessment notices are not mailed by February 1 in a year of reassessment,
the prior year =s property tax assessment must be used to calculate taxes
for the current year.
What if I disagree with my property value?
If after receiving your assessment notice, you disagree with the new value
assigned your property, you have the right to appeal. An appeal must be filed in writing
within 30 days of receiving the assessment notice. You must file your appeal with the
county assessor. Don =t wait until your tax bill arrives to appeal your new
value; it=s too late then.
If you appeal your property value and the appeal is not settled by
December 31, you will be billed for at least 80% of the assessed value for the current
year. You may request in writing that you be billed for more than 80% in order to avoid
paying interest should your appeal not be successful. The tax must be paid by January 15.
Once the appeal is resolved, you may receive a refund or be expected to
pay additional tax, depending on how the appeal is resolved. You must pay interest at the
current prevailing rate on any outstanding taxes owed. Likewise, if your appeal is
successful and your taxes are less than what you paid, the county will pay you interest.
Will my taxes increase because of reassessment?
Some property owners will notice a decrease in their tax, some will stay
the same and some will pay more tax. Reassessment is not intended to raise taxes, it is
intended to distribute the tax burden fairly among all property owners.
Because of reassessment, typically you will see that real property values
have increased. Unless a property is badly in need of repair, rarely do property values
decrease. Because of the increase in property values throughout the county, the millage
rate can then be lowered without decreasing the total amount of taxes collected in the
county.
If it has been a long time since your home has been reassessed, you will
likely see an increase in your taxes. That =s because your home has been taxed
at less than its fair market value.
How do I pay my property tax?
The county treasurer or tax collector mails property tax bills during the
fall of each year. You can pay your taxes by mail or in person at the county treasurer =s or
tax collector=s office. Property taxes are due no later than January 15
of the following year. If you itemize your federal income tax deductions, be sure to pay
your property tax before December 31 in order to claim the deduction for this year.
If a lending company holds the mortgage to your house, the county
treasurer or tax collector may bill the mortgage company for your property tax. You may
call the county treasurer or tax collector to make sure the mortgage company has paid the
tax in your behalf.
Are there any available property tax breaks?
For all homeowners
Each homeowner is allowed an exemption of up to $100,000 of the
home =s fair market value from property taxes for school
operating costs. The amount of the savings will vary depending upon the millage rate for
school operating costs in the school district where you live. This exemption applies only
to your legal residence, not to second homes, vacation homes or rental homes. No
application is needed for this exemption. It will automatically be reflected in your tax
bill.
For homeowners age 65 and older, disabled or blind
If you are 65 or older, totally disabled or legally blind and have
lived in South Carolina for at least one year, you may qualify for the homestead
exemption. The homestead exemption excludes the first $20,000 from the fair market value
of your legal residence. Application for the homestead exemption should be made at the
county auditor =s office.
For certain military veterans, veterans killed in the line of duty,
paraplegics and hemiplegics
A house and up to one acre of land on which the house is located
is exempt from property tax for veterans who are totally disabled from a service-related
disability or the surviving spouse, for the surviving spouse of a military person killed
in the line of duty, and for paraplegics, hemiplegics or their surviving spouses.
Application should be made through the South Carolina Department of Revenue. Call (803)
898-5480 for information.
For POWs, disabled veterans, Medal of Honor recipients, and people
required to use wheelchairs
Up to two motor vehicles are exempt from property tax for
prisoners of war, disabled veterans, Medal of Honor recipients and people required to use
wheelchairs. Application should be made through the South Carolina Department of Revenue.
Call (803) 898-5480 for information.
Discounts and installment payments
Counties may allow a discount if you pay your property taxes
before January 15 of the following year. Counties may allow property taxes to be paid in
installments so long as all payments are made by the January 15 deadline. Both of these
provisions must be approved by the county council before they may be implemented. Call
your county treasurer =s office to determine if your county allows discounts or
installment payments.
Local option sales tax
In counties where voters have approved the local option sales tax
(LOST), 71% of the revenue collected from that additional 1% tax must be earmarked for
property tax relief. This will be shown on your property tax bill if your county has the
local option sales tax.
Property Tax Calendar
October 1 - Property tax bills are mailed
January 15 - Property taxes for the prior year must be paid to the county
treasurer no later than this date
January 16 through February 1 - Property taxes for the prior year paid
during this period are subject to a penalty of 3%
February 2 through March 16 - An additional penalty of 7% is added to
taxes for the prior year paid during this period
March 17 and later - An additional penalty of 5% is added to taxes for the
prior year paid after March 16 and the county treasurer or the delinquent tax collector
begins steps to sell the property to collect the delinquent taxes.
If you are mailing your property tax payment, it must be postmarked no
later than the due date to avoid penalty. If the due date falls on a weekend or a state
holiday, the due date is extended to the next business day afterwards.
Where do I call if I have questions about property tax?
The county council, school board, city council, fire
districts, etc. determine how much money must be collected to fund the budget and
the rate of tax necessary to meet the budget. For many governments, property taxes make up
only a portion of the total amount of revenue needed to fund the budget. Fees and other
sources of income make up the remainder.
The county auditor is responsible for preparing the tax roll
for all real property and maintaining tax records for motor vehicles and other personal
property.
The county assessor is responsible for maintaining tax
records on all real property and for appraising property not valued by the Department of
Revenue or the county auditor.
The county treasurer or tax collector collects
taxes on real property, personal property and motor vehicles.
The South Carolina Department of Revenue provides technical
assistance to counties and has general oversight responsibilities for the administration
of the property tax. The department also determines the value for manufacturing property,
utilities and certain other property.
For telephone numbers for county offices, check the blue pages or
government listings in your local telephone directory.
South Carolina Department of Revenue
301 Gervais Street
P.O. Box 125
Columbia SC 29214
www.sctax.org
January 1999
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