So you’re thinking about purchasing a home in Charleston, SC. You’ve fallen in love with the charm of the local culture, southern beaches and gorgeous houses. We don’t blame you. But now you’re wondering exactly what you’ll be paying every year in property taxes for your Charleston, South Carolina home. Lucky for you, property taxes in South Carolina are the 5th lowest in the U.S.
Here’s a simple equation that will give you a rough calculation of what you’ll pay in property taxes for your home in Charleston, SC:
1. Determine your home’s fair market value.
2. Multiply it by the assessment ratio to get your home’s “assessed value”.
3. Multiply your home’s assessed value by your local millage rate.
We’ll explain what each figure means below. We’ll also provide a sample calculation to show you how to determine the approximate property taxes for your home.
WHAT IS THE “FAIR MARKET VALUE” OF MY HOME?
The fair market value of a home is basically the price that a buyer would realistically be willing to pay for your home. The county assessor is responsible for determining the fair market value of your home.
Three things the county assessor looks at to determine your home’s value include:
- Your home’s value compared to other nearby properties that have recently sold.
- What it would cost to replace the property with one that is similar.
- How much income the property would produce if it were rented out.
Here’s a great article that walks you through how to estimate your home’s fair market value.
Because the fair market value of a home can fluctuate, county assessors can reassess the value of your home every 5 years. If your home’s value increases by more than $1000 when it’s reassessed, you’ll get a notice in the mail by December 31st.
WHAT IS THE “ASSESSMENT RATIO” IN CHARLESTON, SC?
The assessment ratio is the percentage of your home’s value that is “taxable”.
The SC assessment ratio is 4% for a primary residence.
That means if you live in that home more than 50% of the year, you can qualify for the 4% rate. But here’s what most homeowners don’t realize: You actually have to apply for that lower rate of 4%. Otherwise, once you buy a home, you are automatically taxed at 6%.
Therefore, as soon as you close on a house, if it will be your primary residence, you’ll want to file an application for the 4% assessment ratio. Once you apply for the lower rate, you won’t need to file for it again.
If you are currently being taxed at 6% and your home is your primary residence, click here to apply for the Charleston County “special assessment ratio” tax of 4%. As long as you file your application before January 15th (and assuming your application is accepted), you will be taxed at 4% for the prior year.
If you do not live in the home more than 50% of the time or rent it out, you will will remain taxed at the 6% rate.
WHAT IS THE “MILLAGE RATE”?
The millage rate is a dollar amount of tax owed for every $1000 of assessed value. A mill is equal to 1/10 of one cent. This portion of your tax money goes to the county’s political subdivisions like the school district, county, city etc. Because the millage rate is set by local governments, it varies from municipality to municipality.
Local municipalities millage rates can be found here.
SAMPLE CALCULATION FOR RESIDENTIAL PROPERTY TAXES IN CHARLESTON, SC
So now that we know a bit more about each of the property tax terms, let’s look at how you would calculate the property tax on your home in Charleston, SC. In this example we will assume:
- Your home’s fair market value is $550,000
- The assessment ratio is 4% (owner occupied)
- The millage rate is 2634
Here’s how you would calculate your residential property tax given these numbers:
Multiply your home’s fair market value by the assessment ratio to get your home’s assessed value:
Then multiply your home’s assessed value by your local millage rate:
So $5795 would be the rough estimate that you’d be expected to pay in property taxes. For a more exact answer, contact a licensed tax attorney or use Charleston County’s online tax calculator to help you determine your residential property taxes.
NEED HELP FROM A CHARLESTON REALTOR?
Knowing what you’re expected to pay in property taxes each year helps you make informed decisions regarding the purchase of your new home.
Have questions about the value of your home? We offer an easy home valuation tool – just enter some information about the property and we’ll follow up with detailed information shortly.
Disher, Hamrick & Myers looks forward to helping you navigate our beautiful Charleston properties!
*Note: for information only. Not to be regarded as legal advice.