Key Takeaways
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The Two Tiers: SC taxes primary residences at a 4% assessment ratio and secondary/investment properties at a 6% ratio.
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The School Tax Exemption: Primary residents (4%) are exempt from paying school operating taxes, which effectively cuts your total tax bill in half (or more).
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It Is Not Automatic: You must actively apply for the 4% Legal Residence Exemption with your county assessor.
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The Audit: Do not try to claim the 4% rate on a vacation home or Airbnb. Counties aggressively audit this, and the penalties are severe.
If you are relocating to South Carolina from a high-tax state like New York, New Jersey, or Illinois, you have probably heard rumors about our incredibly low property taxes.
Those rumors are true. South Carolina is incredibly friendly to homeowners. However, there is a massive catch that out-of-state buyers frequently miss: Our low property taxes are reserved exclusively for primary residents.
If you do not file the correct paperwork, or if you are buying a vacation home, your tax bill will be significantly higher than the Zillow estimate led you to believe. Here is how the famous "4% vs. 6% Rule" actually works.
Understanding Assessment Ratios In South Carolina, your property tax isn't just a flat rate. The county takes the appraised value of your home and multiplies it by an "assessment ratio" to find the taxable value.
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Primary Residences are assessed at 4%.
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Second Homes, Rentals, and Vacant Land are assessed at 6%.
While the jump from 4% to 6% doesn't sound huge, the math is brutal.
The Real Magic: The School Tax Exemption The biggest financial benefit of being a primary resident isn't just the 4% ratio—it's that primary residents do not pay the school operating tax. If your home is classified as a 6% property (second home/investment), you pay the full millage rate, including the school taxes. The result? A 6% property tax bill is typically triple (3x) the cost of a 4% property tax bill on the exact same house.
Neighborhood Watch: Where It Hurts the Most
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Folly Beach & Isle of Palms: These areas are dominated by second homes and short-term rentals. If you are buying a $1.5M beach house as a vacation home, expect to pay the 6% rate, which can easily mean a $15,000+ annual tax bill.
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Downtown Charleston: Many buyers purchase historic condos as part-time residences. If your driver's license doesn't say South Carolina, you are paying 6%.
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Summerville & West Ashley: Because these are primary resident strongholds, nearly everyone here enjoys the 4% rate, keeping monthly escrows remarkably low.
How to Claim Your 4% Rate You do not get the 4% rate automatically at closing. You must physically move in, switch your driver's license and vehicle registration to SC, and then submit the "Legal Residence Application" to your local county assessor (Charleston, Dorchester, or Berkeley). If you forget to file, you will be billed at the 6% rate!
Frequently Asked Questions:
Q: Can I rent out a room in my 4% primary residence? A: Yes, but with strict limits. You can rent out your primary home for no more than 72 days a year. If you exceed that (like running a full-time Airbnb out of a back unit), you lose the 4% status.
Q: Does South Carolina have a tax break for seniors? A: Yes! The SC Homestead Exemption exempts the first $50,000 of your home's value from property taxes if you are over 65, legally blind, or permanently disabled.
By: Dustin Guthrie, Realtor
📞 Call/Text (843) 697-7757
📧 [email protected]
📸 Instagram @dustin_guthrie_realtor
