What’s Up With This Property Tax Bill?
If you own real property, tis the season for Horry County tax bills. If you received your bill and are in shock, you are not alone. While I can’t know specifics about everyone’s situation, I can go over how things work in general. While this doesn’t apply to everyone, hopefully it will be helpful to some.
What are property taxes and how are they determined?
Property taxes are collected from property owners in order to provide services such as: school, public safety, public libraries, and other essential government run services. Property taxes are taxed in accordance with the property’s most recent assessed value. FYI: Assessed value and market value are not always the same since assessments are not done each year. When the County Council determines the annual budget, they set the tax levy which is indicated as the ‘millage rate’ or ‘mills’. (1 mill is 1/1000 of $1 or .001) Horry County has separate offices that handle specific aspects of property taxes. The Assessor’s office determines the value of the property. The Auditor’s office calculates the taxes based on that value and maintains the tax rolls. The Treasurer’s office collects the taxes.
The assessed value is multiplied by the appropriate assessment rate for the type of property. Owner occupied residences are taxed at 4% while second homes, vacation homes, and investment property is taxed at 6%. Taxes are billed for the previous tax year, based on the previous year’s value, millage, and rate and are determined by multiplying the value X the assessment rate X the millage rate.
What happens when a property transfers?
When a property transfers from one owner to another, the taxes are typically prorated at closing. So, let’s just say a property gets sold in July. Tax bills don’t go out until October. Usually, the settlement statement will show a credit from the seller to the buyer for their portion of the taxes. (based on when they owned the home) In this case, when the taxes are due, the buyer is responsible for the entire bill since they received a credit for the seller’s portion already. Keep in mind, the bill received this year is based on the previous year’s assessed value, millage, and rate. It could be 4% or 6%, with or without homestead exemption, agricultural use rate, taxed as raw land if a house has recently been built, etc. (In that last instance, rollback taxes could apply. I’ll talk abou that in a future blog.) Upon transfer, the taxes automatically default to the 6% rate. It is the responsibility of the new property owner to apply for the lessor rate!
What does a property owner need to do in order to be taxed appropriately?
Since the property taxes automatically default upon sale or transfer to the higher 6% tax rate, any other uses need to be applied for after the property officially transfers. Most real estate agents and attorneys inform their buyers about this prior to and/or at closing. Even so, there’s a lot going on during the move and sometimes people forget to apply for the primary residence rate. Ideally, this is done prior to the tax bill coming out in October or the home owner may find themself in a long line waiting to try and correct their bill.
To apply for the Legal Residence Rate
To apply for the 4% rate, go to the Assessor’s office or visit the Horry County Government site. This site will familiarize you with the qualifications and give you access to the legal residence application.
To apply for the Legal Residence Rate, you will need:
-SC driver’s license or SC state issued ID for ALL owner occupants and spouses
(License or ID must reflect your CURRENT address)
-SC Motor Vehicle Registration for ALL owner occupants and
spouses (Registrations must reflect CURRENT address)
-Copy of your most recently filed tax returns (for all occupants and spouse)
Homestead Exemption:
If you are 65 years old or older and have been a SC resident for 1 year (on or before December 31 preceding the tax year you want to claim the exemption) you can apply for a homestead exemption. This will reduce the assessed value by $50,000.
Some additional information:
If you have a mortgage and your property taxes are being collected each month as part of your house payment to be held in escrow, you still might get an Horry County tax bill, but it should say ‘copy’ if your mortgage company in responsible for paying it. If you are not sure, check with your mortgage company.
If you owe property taxes on your home/land and have not received a tax bill by November, you are still responsible. Here’s a link to the Horry County Tax Payer Services Page
This year, there seems to be a lot of people who did apply for the 4% rate, but still got billed 6%. I’ve been told by those who have gone to the county office that even though the lines are long, they are working hard to correct the bills that were sent with the wrong rate.
Don’t hesitate to reach out with any questions on this or any real estate related topic. Have a great weekend,
