–Drew Grossklaus, Sales Director/BIC East Cooper
Many of our clients first fall in love with Charleston while visiting on vacation. They experience the beach, history, food, people – and feel a calling of wanting to be a part of it all. Before making the Lowcountry a permanent home, they might first have the idea of potentially owning a vacation home or a second property. In the excitement of exploring the home buying process, one thing that is often overlooked is property taxes, yet this is one of the most important items William Means agents discuss with out-of-town buyers.
The Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence just released a study titled 50-State Property Tax Comparison Study: For Taxes Paid in 2022. The study reviewed different property tax systems as they vary widely from city to city. It analyzed what they called “homestead” property tax rates, which we locally refer to as primary home tax rates. In the 53 cities observed in the study, Charleston ranked as the second lowest, coming in just higher than Honolulu, Hawaii.
The study discussed that it is pertinent to review how cities receive property tax from other classifications like commercial and what they titled “apartment” (we deem this as secondary property). The data was interesting in that it showed in the categories of Commercial and Apartment (secondary), Charleston had the highest ratio of effective tax rate versus Homestead (primary) of the 53 cities reviewed. The data also revealed that Charleston puts a lot of the property tax burden on commercial and secondary homes to reduce the property taxes for primary homeowners.
It is simple to see when applying tax estimation numbers to a home purchase in Charleston. In this scenario, the home is in the City of Charleston Tax District and has an appraisal value of $1.3 million.
The primary residence tax estimation would be $6,190.80.
The secondary residence tax estimation would be $20,696.20.
This is an extreme difference of 234%.
Understanding the nuisances of property taxes is crucial during the decision-making process of purchasing a home in Charleston. Based on the metrics, it could influence whether you decide to sell your current home and make Charleston your primary residence or keep a residence in another city. William Means agents are always here to help you with any questions and review the options that are best for you.
Source:
50-State Property Tax Comparison Study
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