South Carolina Real Estate Tax Changes

In June of 2006, the Legislature passed and the Governor signed in to law two bills aimed at comprehensive property tax reform. The first bill made changes to statute governing real property taxes and allowed for property tax swap. The second bill allowed for a Constitutional amendment, subject to voter approval, to change the way real property is assessed. This Constitutional amendment was approved by 69% of South Carolina voters in the 2006 General Election.

Property tax reform was a highly public issue that received a great deal of attention from legislators, as no-tax advocates convened daily at the State House and turned supporters out at rallies, hearings, and committee meetings. Many differing versions of property tax reform were drafted and considered, including a proposal that would fund property tax reform through an $18 per $1000 of property value increase in the real estate transfer fee and another that would double the current fee. The new law represents a compromise between House and Senate proposals and does not include any increase in taxes and fees on real property transfers.

Specifically, the new property tax law:

eliminates the school operating portion of property taxes on primary residences and replaces them with a one-cent statewide sales tax; decreases sales tax on groceries to three percent; includes a provision addressing school funding inequities; money left over after that goes towards reducing county operating expenses; changes the method of reassessment on all classes of property and caps increases in taxable value to 15% over a 5-year period; reverts to point of sale reassessment on all real property transfers; established tax free holidays for the two days following Thanksgiving of 2006; closes the alternative financing loophole that local governments use to circumvent the constitutionally mandated eight percent debt limit; is tied to spending and millage caps on all levels of government; and allows voters of any county to further reduce property taxes on all classes of property through passage of an additional sales tax referendum.
To read the new laws, please click here.

Courtesy of Cashion Didier of the South Carolina Association of Realtors.

Sources: Greenville News, Greenville Journal, GSA Business

Simpsonville Real Estate Agent - Mechelle Cunningham