South Carolina’s property tax system is an outlier compared to the rest of the United States.
- South Carolina is the only state in the country which exempts primary homeowners from paying property taxes to fund school operating costs.
- The effective property tax rate for a median value home in Charleston ranks 51st lowest among the largest cities in each of the 50 states and the District of Columbia.2 (Effective property tax rate is equal to property taxes paid divided by property value. A property owner paying $1,000 in property taxes on a $100,000 home faces an effective property tax rate of 1%.)
South Carolina’s disparate effective property tax rates are both unfair and inefficient.
- The differential between the effective property tax rates for primary residential and other residential property is so great that assessment offices must devote considerable resources to prevent fraud since the prospect of a dramatically lower tax bill can tempt property owners to dishonestly report residential property as their primary home.
South Carolina’s property tax lacks transparency because of fragmented property tax administration, inconsistent language, and varying land use codes.
- Assessment authority is divided among assessors, auditors, and the Department of Revenue. No single entity holds the entire property tax roll for a county.
- The term “taxable value” means different things in different counties. This is not the only instance of inconsistent language.
This report concludes that South Carolina’s property tax system is complex, nontransparent, unfair, and inefficient. South Carolina’s Act 388 passed in 2006 with the aim of providing property tax relief to certain homeowners. However, by shifting greater property tax burdens from homeowners to businesses and renters, it increased the disparity in property tax rates and made South Carolina’s property tax system more of an outlier compared to the rest of the U.S.