Second home tax question (North: sale, rental, lawyer)

[ss20ts]

Originally Posted by JN5147

ss20ts - The point is that I am paying for the educational operating expenses of the schools in my property taxes and you pay ZERO. If I had toys in SC I would pay taxes on them just as you do. You, however, do NOT pay any property taxes to support the operating expenses of the schools for SC children and you are a resident. Shame on you. No wonder SC has a deficient public education system. The residents don't support it.
Back to the original question of this thread - SC treats non-residents very differently on property taxes. It's safe to say that NR's pay at least 3 times what residents pay for like properties. As I said in a previous post, the law was changed AFTER we made the decision to buy in SC. If that law was in effect when we were doing our research we never would have chosen SC for a second home.
I also challenge you to come up with another state that lays the cost of education of the resident's children on non-residents.

Not all residents don't support education. Yes, there are many who don't, but it's not everyone. This happens in all 50 states. Many people want something for nothing. Funny how someone somewhere has to pay for it! There's no such thing as a free ride.

I didn't say there were other states that hit up non-residents for such a large chunk of education. Many other states hit you HARD on a variety taxes and use those monies for education, roads, politicians, etc.

You could always sell your SC home. Yes, it may sit on the market for a year. But doing nothing doesn't make you feel better. Clearly, you are very unhappy about this. You still can't have a second home in many states for less in taxes. Your taxes are a drop in the bucket compared to what I paid for my home in Upstate New York. And the school system we had sucked. There were 4 elementary schools for a city of 15,000. WHY? At least, here in SC we don't have individual school districts. In many states, every piddlybop town has their own school system. That costs a FORTUNE!

[janrey]

Originally Posted by JN5147

Janrey - Big Deal! a 1% additional Sales Tax on $20,000 of taxable items amounts to a whopping $200. The portion of your car tax allocated to School Opertions is miniscule. We pay $2,500 in School Operations Tax in our Property Taxes. Not complaining about the 6% vs 4% because we knew that when we bought in SC. PA 388 was passed after we bought and saddled all non-residents with 95%of the School Operations cost to educate the resident's kids. Don't even mention the bonding costs because we pay that also. Also, we do pay the additional 1% Sales Tax when we are there. Sick of paying for the education of SC kids in our residential property taxes while the residents pay ZERO. Can't sell because the word is out. SC discriminates against non-residents in it's tax structure.

I wasn't in favor of moving school taxes off property because I think tying any taxes to sales is a bad move. Economy tanks and people purchase less, revenues decrease but to make it fair they should have reduced the amount on property tax.

As for your paying taxes on a secondary home, if this is rental property just figure it into the cost of rental. You were always paying it, even before you bought. You're paying no more than you would if the law didn't change, they didn't say lets add more to non-residents they just didn't remove that tax from non-residents. If you didn't like the amount you pay now why has that changed? I don't get it. Yeah I get why you don't like paying for schools in a state you have no children going to said schools but you knew this when you bought it. The change in law doesn't change that you pay x amount and you still pay x amount for schools. You aren't paying x plus what residents were paying. The schools instead are dealing with less money to work with. Yeah they increase the millage rate but that millage rate most likely would have increased regardless of the tax change.

[JN5147]

Originally Posted by janrey

I wasn't in favor of moving school taxes off property because I think tying any taxes to sales is a bad move. Economy tanks and people purchase less, revenues decrease but to make it fair they should have reduced the amount on property tax.

As for your paying taxes on a secondary home, if this is rental property just figure it into the cost of rental. You were always paying it, even before you bought. You're paying no more than you would if the law didn't change, they didn't say lets add more to non-residents they just didn't remove that tax from non-residents. If you didn't like the amount you pay now why has that changed? I don't get it. Yeah I get why you don't like paying for schools in a state you have no children going to said schools but you knew this when you bought it. The change in law doesn't change that you pay x amount and you still pay x amount for schools. You aren't paying x plus what residents were paying. The schools instead are dealing with less money to work with. Yeah they increase the millage rate but that millage rate most likely would have increased regardless of the tax change.

First, we not rent our second home. Second, I never said I don't like paying for schools in a state where we have no children attending. I will support local education wherever we own property. I do object to paying for the school operting expenses in my property taxes while the residents (who most have children attending the schools) pay nothing. Third, I am not sure where you are getting your numbers, but my property taxes went up significantly when the law changed because we are paying for what the residents WERE paying. Our millage rate is double what my resident neighbor's rate is. Please do your homework on this issue before putting off incorrect info.

[randy56]

i have two homes in sc in the last three weeks i have been informed that my property taxes are not four percent but 6 and also there are millage fees on top of this also they are going back three years there is something really wrong with this whole concept. i have paid my taxes the second house i put up for sale and got no response at all now this comes at me. if any ideas please respond thank you

[gvlgal]

If neither property is your primary residence then the tax rate will be 6%. If one is your primary residence you can have the tax bill amended to reflect 4%. I believe that when you purchase a property the taxes will automatically be billed at 6% until you provide proof that it is owner occupied as a primary residence. At least that was the case when I purchased my home in 1995.

[accufitgolf]

Originally Posted by gvlgal

If neither property is your primary residence then the tax rate will be 6%. If one is your primary residence you can have the tax bill amended to reflect 4%. I believe that when you purchase a property the taxes will automatically be billed at 6% until you provide proof that it is owner occupied as a primary residence. At least that was the case when I purchased my home in 1995.

In 2011 I owned two homes in SC and I had to decide/claim (be able to prove....another issue.....LOL) which was my primary residence so it seems this has not changed much.

[myrc60]

There was an item in our closing in 2003 about deciding on occupation or not. It wasn't an option for us as we only have one home.

[Butterfly4u]

Randy,
Are you living in one of the homes?
Do you live in another state outside of SC?
If you live in SC in one of the homes, call and ask the woman at the tax office for your county what you need to bring in to adjust your real estate tax bill. They will bill one of the homes at a resident rate.
They will adjust that.
The home you can't sell, rent it out as soon as possible.
Don't want the hassle? Ask around for a good property management
company and they will handle it for you.
People really need rentals right now, there just aren't enough available, so you could rent it out right away.
Scrape the money together and pay up on the taxes on the rental, charge enough rent to cover it for next year.

[Bummbull]

It's not just the 4% vs 6%. I was calculating this several weeks ago and someone else was telling me that it's just 4% vs 6% on this forum, but that's not true. It's also the millage rate that's different between resident vs non-resident. That's why the property tax is like $1,500 vs $5,000.

[janrey]

Originally Posted by JN5147

First, we not rent our second home. Second, I never said I don't like paying for schools in a state where we have no children attending. I will support local education wherever we own property. I do object to paying for the school operting expenses in my property taxes while the residents (who most have children attending the schools) pay nothing. Third, I am not sure where you are getting your numbers, but my property taxes went up significantly when the law changed because we are paying for what the residents WERE paying. Our millage rate is double what my resident neighbor's rate is. Please do your homework on this issue before putting off incorrect info.

Late on responding here but I'm not sure you understand millage rate. Millage has nothing to do with property value, being resident or non resident. It is the rate of which an area charges per dollar assessed. You're neighbor if in the same tax area pays the same millage rate. Assessed value, on the other hand, can vary widely. They reassessed some residents this tax bill and in many cases did so incorrectly. My house was assessed well above the market value. I appealed it and it was turned back. If that's what happened you should have appealed it. It maybe too late for this year to appeal but look into it if the assessed value is above market value. They also don't seem to assess fairly although they are trying to correct this because they often didn't assess some homes for many year but all homes sold are reassessed on sale making it an unfair tax burden on the new owners and those who did and do seem to get reassessed often.

The assessment (not millage rate) is 4% for resident and 6% for non resident property. That is on the property value. This is the amount that is subject to tax. For example: If your house is worth $100K the following would be what you see.

$100,000 @ 4% = $4,000
$100,000 @ 6% = $6,000

The millage rate in my area (it differs from area to area) is .25560 this year last year it was .25090 (so yeah it went up for me a resident). I checked a home down the street in my neighborhood that I know, for a fact, is a rented home. It's millage rate is the same, the exact same, .25560.

So a home that is a resident's home their taxes would be $1022.40 minus the school tax credit for a non resident it would be $1533.60 with no school tax credit. So yes, after school tax credit for residents (which instead was added to sales tax which I would think a resident pays more of than a non resident) the tax is probably double but the millage isn't any different.

To give you an example, I'll compare my house with the house that is a rental. It's value is below mine. I paid $1400 in taxes, they pay $3400. Their property tax from last year went up a $100 or so as did mine even though I got the school tax credit. I still pay for schools as there is still some school taxes being paid in my property tax and I pay when I shop. I also pay school taxes on the property taxes on my cars as well and any other property I might own say a boat.

So, yes, I do know what I am talking about. You might say your taxes increased a lot from last year and most likely they did if your property was reassessed. Always, always look at the assessments and make sure they are inline with what sales are doing in the area because some of these assessments were based on values 2 years ago.