People buying homes in future will face double whammy
This year brought large changes in the way South Carolinians are taxed to
pay for public schools, but there's more to come.
In 2007 the statewide sales tax went up to 6 percent and the property tax on
owner-occupied homes that paid for the operation of schools was eliminated.
Next year, there's expected to be an additional property tax cut for
homeowners, in county and municipal taxes, because the state's higher sales
tax raised more money than needed to reimburse schools for the forgone
property tax money.
But the really big property tax changes will come from the reassessment cap
that voters approved with a constitutional referendum, and new caps on
property tax increases.
The limit on tax increases bars local and county governments, and school
districts, from raising their property tax rates more than allowed by a
formula based on consumer price inflation and population growth.
However, governing bodies can exceed the caps for specific purposes ranging
such as the need to cover a budget shortfall from the previous year,
responding to a natural disaster, or paying for unfunded state or federal
mandates.
While the tax limits aim to keep a lid on tax rates, the assessment cap will
dramatically shift property taxation in the coming years from longtime
property owners to property owners who recently moved or relocated.
The new rules say that when there's a reassessment, which typically happens
every five years, the taxable value of a property can't be increased by more
than 15 percent unless it was sold or substantially improved.
Reassessment is the process in which counties recalculate how much
properties are worth for the purpose of taxing them.
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