KEY FINDINGS
SOUTH CAROLINA’S PROPERTY TAX SYSTEM
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 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%.)
• Manufacturing in Charleston, South Carolina faces the 4th 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.
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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.
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. 2
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