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Mount Pleasant SC Homes for Sale, Mount Pleasant SC Real Estate for sale, Mount Pleasant SC Condos, Mount Pleasant SC Homes for Sale Listings, Charleston SC Fractional Homes for Sale
South Carolina Property Tax & AssessmentsProperty Tax & AssessmentsWhat's an assessment?
Assessments are the basis for property taxes, just as income is the basis for income taxes. Assessments are multiplied by tax rates set by local governments and school districts to determine property tax bills. In South Carolina, assessments represent 4 percent of the estimated value of owner-occupied properties and 6 percent of the value of most other properties. Buy or build? In one wrinkle to the new rules for property reassessment, a home that is bought gets reassessed at full market value, but a home that is built can be assessed like a home improvement. As a result, if someone buys a $180,000 house on a $30,000 lot, he would be assessed at roughly $210,000. Someone who buys a $30,000 lot and builds a $180,000 house would be assessed at about $150,000 - $30,000 for the lot and about $120,000 for the house, based on 2003 values used in Charleston County's last reassessment. In addition, tax caps will keep assessments well below market value in the years ahead, but additions and major improvements will be added to those assessments. Tens of thousands of South Carolinians who bought property in 2007 will see hefty property tax increases this year because of changes to the tax system that voters approved in a 2006 constitutional referendum. The referendum capped increases in the taxable value of properties during countywide reassessments, but it also mandated the quick reassessment of any property that changes hands, at full market value."The people who bought last year are going to see, on average, a 50 percent increase," Charleston County Deputy Assessor Bobby Cale said. The referendum was part of a statewide tax reform effort fueled by irate property owners who had seen their taxes rise during reassessment because their property had gained so much value, such as in downtown Charleston and on barrier islands. As part of the tax changes, homeowners were exempted from the property taxes that fund schools, and the statewide sales tax was increased to make up the revenue. Now, many new homeowners will see those school tax savings wiped away by reassessment. The owners of recently sold commercial properties also will see their taxes rise, and that could put them at a competitive disadvantage. 'I have one investor client that told me - Call me when your state gets the tax law straightened out and we'll look at properties in South Carolina again,'?' said Michael Dodds, with the Columbia office of Integra Realty Resources, the nation's largest property valuation and counseling firm. The 2006 constitutional referendum put a 15 percent cap on how much a property's taxable value can increase during a reassessment, but the cap applies only if the ownership did not change. The measure requiring that properties be reassessed at full value the year after they change hands means they could be reassessed years before a general reassessment is planned. There are a few exceptions, but even a parent selling a property to a child would trigger reassessment. The result is a tax system in which next-door neighbors, landowners and competing businesses will be taxed differently depending on when their property was purchased. 'The new property tax law locks that inequity in,' Dorchester County Assessor Wayne Welch said.'I have a sense that people voted for this in the referendum because they thought their property taxes would be capped,' Welch said. 'I don't think people realize what they have done to first-time buyers.' The impact of the tax disparities is even greater for businesses. 'Obviously, it's affecting commercial real estate the most because they pay the 6 percent (assessment) rate and they don't get the school tax break,' said Kari Riegle, governmental affairs director for the Charleston Trident Association of Realtors. Charleston resident Emerson Read, chairman of NoHomeTax.org, was a leader in the push for statewide property tax changes. He said that most property owners won't be affected by the accelerated reassessments. 'Well, that's only if you sell,' Read said. 'They (homeowners) will still have the credit on the school taxes, and the benefit of the millage cap.'He said his organization is not pleased with the full-value re- assessment of properties that change hands and hopes to see the rule changed in the future, although that would require another constitutional amendment. Under the old system, someone who bought property in Charleston County in 2007 would have been taxed based upon what the property was worth in 2003, because that is the year that values were pegged to during the 2005 countywide reassessment. Under the new system, someone who purchased property in 2007 will be taxed on what the property was worth at the end of 2007, an increase of about 46 percent over the 2003 values in Charleston County, based on statistics from the assessor's office. Cale points out that, unlike in a countywide, general reassessment, in which property values increase but tax rates decrease, the reassessment of recently sold properties will not be accompanied by a tax rate rollback. While countywide reassessments redistribute taxes, leaving some with lower bills than before, re-assessing only the properties that have been sold will mean higher taxes unless a property is actually worth less than five years ago. Many homeowners who purchased in 2007 will wind up paying more than they would have if the tax reform initiatives had never been approved.
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