Key Findings

South Carolina’s property tax system is an outlier compared to the rest of the United States. For example:

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 51 st 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%.)

Manufacturing in Charleston, South Carolina faces the 4 th highest effective property tax rate among the largest cities in each of the 50 states and the District of Columbia. (This does not take fees in lieu of taxes into account.)

The ratio of the effective property tax rate for apartments to that for primary home owners is over three. This means that apartments are taxed at over three times the rate of primary homes. This is the highest apartment-homestead differential in the country.

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.

Because of the high effective property tax rates on manufacturing, South Carolina uses FILOTs and other tax abatements to level the playing field and make South Carolina more attractive as a business location. But FILOT deals are uncertain, time consuming, and entail legal expenses. Also, FILOTs are only available for companies making substantial new capital investments.

2 Charleston is currently the most populous city in South Carolina. That is the reason that we report the effective property tax rate for Charleston in our most recent national data on effective property tax rates.

The fact that primary homeowners do not pay property taxes to operate schools is unfair in two respects. Homeowners are the primary beneficiaries of school spending, so it is fair that they should help pay to operate schools. Second, homeowners typically have higher incomes than renters. South Carolina taxes apartments the same as commercial property so renters are paying taxes at an effective rate three times higher than homeowners.

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.

Each county has different land use codes. For example, York County has 23 land use codes and Horry County has 225 land use codes.

Many counties do not use separate land use codes for properties subject to different assessment ratios. For example, in Greenville County one land use code includes both primary residential property (assessed at 4 percent) and other residential property (assessed at 6 percent).