South Carolina is known for its beautiful beaches, historic landmarks, and friendly people. However, it is also home to some unique property tax laws. The state has two property tax rates: 4% and 6%. While they may seem similar at first glance, there are significant differences between the two.
The 4% property tax rate is also known as the primary residence tax rate. It applies to properties that are considered the owner’s primary residence. This means that the property owner must live in the home for at least six months out of the year. If the owner qualifies for the 4% rate, they will pay property taxes based on 4% of the assessed value of the property. For example, if the assessed value of a primary residence is $200,000, the property taxes would be $8,000 per year.
The 6% property tax rate is the non-primary residence tax rate. This rate applies to any property that is not considered the owner’s primary residence. This includes second homes, rental properties, and vacation homes. If a property owner has multiple properties, they can only claim one as their primary residence and qualify for the 4% rate. All other properties will be taxed at the 6% rate.
The primary difference between the two rates is the amount of property tax that is paid. With the 4% rate, property owners can save a considerable amount of money on property taxes. For example, if a property owner has a home valued at $500,000, they would pay $20,000 in property taxes at the 4% rate. However, if the same property is taxed at the 6% rate, the property taxes would be $30,000 per year.
Another difference between the two rates is the eligibility criteria. To qualify for the 4% rate, the property must be the owner’s primary residence. This means that the owner must live in the home for at least six months out of the year. If the owner rents out the property or uses it as a vacation home, they will not qualify for the 4% rate. However, with the 6% rate, the property can be used for any purpose, including as a rental or vacation home.
The property tax rates in South Carolina can have a significant impact on property owners’ finances. Therefore, it is essential to understand the differences between the 4% and 6% rates before purchasing a property. Property owners should also be aware that the assessed value of their property can change over time, which can affect their property taxes. For this reason, it is important to stay up to date with property assessments and any changes to property tax laws.
The 4% and 6% property tax rates in South Carolina are designed to provide a tax break for primary residences while taxing non-primary residences at a higher rate. Property owners should be aware of the eligibility criteria and the differences in property tax rates to make informed decisions about their properties. By understanding the unique property tax laws in South Carolina, property owners can save money on property taxes and enjoy the many benefits of living in this beautiful state.