Charleston South Carolina Real Estate Information

The New South Carolina Tax Reform Act

Mike Huggins, Charleston County Tax Assessor, provided the folowing update of The Property Tax Reform Act affecting Property Owners throughout the state of South Carolina

Changes state tax rates.

Exempts owner occupied residences from school operating taxes.

Limits taxable value increases due to reassessment.

Requires properties to be reappraised when an assessable transfer of interest (ATI) occurs.

Requires owners of real estate to annually file a certificate of ownership.

New construction is appraised at reassessment level unless an ATI occurs in the same year.

Changes period in which owner may appeal.

Sales Tax

Sales tax on unprepared food was reduced from 5% to 3% effective October 1, 2006.

State sales, use, and casual excise tax will increase from 5% to 6% on June 1, 2007. This will not apply to unprepared food or accomodations.

Additional sales tax will go to the newly created Homestead Exemption Fund.

Revenues from this fund will be used to exempt owner-occupied residences from school operating taxes.

Property eligible for and receiving the special 4% assessment ratio allowed owner-occupied residential property is exempt from all property taxes imposed for school operating purposes.

Savings 

Home Value                                                         Tax Bill Reduction

$100,000                                                                $79.60

$200,000                                                                $450.80

$500,000                                                                $1564.40

$1,000,000                                                            $3,420.40

(Figures based on 2006 tax rates)

Countywide Reassessment

Reassessment are required every five years. Charleston County's last reassessment was in 2005. The next will be implimented in 2010.

Any increase in the fair market value of real estate property attributable to a periodic countywide a[[raisal ane equalization program is limited to 15% within a five-year period. Prior to 2007 there was no limit to increases due to reassessment.

Assessable Transfers of Interest

Property experiencing an assessable transfer of interest (ATI) in 2007 or later will be reappraised at current market value for the following tax year. Prior to 2007, property was not reappraised due to a change in owneship. An assessable transfer includes:

A conveyance by deed.

A conveyance by contract.

A conveyance to a trust(unless seller or spouse is beneficiary).

Distribution from a trust(unless distributee or spouse is beneficiary).

A change in beneficiary of a trust(unless adding or substituting a spouse).

Distribution by will or intestate succession (except if distributee is spouse)

Conveyance by lease if duration is greater than 20 years or lease grants a purchase option at a price that is 80% or less of the property's value at the termination of the lease.

A transaction or series of transactions within a 25 year period that transfers 50% or more interest in a corporation, proprietorship, partnership, LLC,LLP or other legal entity.

Change in use of agricultural property if the change results in a rollback tax.

Change in use as a result of a change in zoning.

Passage of 20 years since 2007 or the last ATI for real property owned by a publicaly-held entity.

Beginning in 2007, each real property tax notice must contain a certificate prescribed by the Department of Revenue which must be signed and returned by the property owner or the owner's agent certifying details of ownership.

New Construction

Includes:

New structures

New imnprovements

Renovations

Additions to property Boundaries

Additions to existing structures

Does Not Include

Minor Construction

Ongoing maintenance and repair

Repair or reconstruction due to defects, fire, or disaster if the repair or reconstruction is begun within 8 years after determination of damage or destruction is made and the repaired or reconstructed structure is similar in size, uility, and function of the origional structure.

New construction is valued at the last reassessment year level unless it is completed in the same year that an ATI occurs.

When new construction is completed during the same year that an ATI occurs, it along with the land and any previously exisitng structures are appraised as of December 31 of the ATI year for the following tax year.

Recap

State sales tax increased to 6%, food tax reduced to 3%

Homeowners no longer pay school operating taxes.

Value can increase no more than 15% at reassessment.

Ne Owners taxed at current market value.

Owners must file a certificate of ownership annually.

New construction is appraised at reassessment level unless an ATI occurs in the same year.

Owners may obkect to value up to 90 days after tax notice if no assessment is sent.