I was doing some research on the taxes in Columbia SC and the 4% for owner occupied and 6% for investment properties and then the millage rates. I was wondering if anyone would be able to share their numbers or a good example how this effected them in their investment and how badly this could change the cash flow for the property especially if it is an investment and not owner occupied. I'm trying to decide before I buy what kind of property I need to look at in order to be able to account for the tax rate.
Assessment ratio is 4% for owner occupied and 6% for non-owner occupied property.
Assessed value = Market value x assessment ratio
Property tax = Assessed value x millage rate.
Millage rates vary by county. Under SC state law, property is reassessed every five years. Not all counties in the state are on the same schedule. Addtionally, you may trigger a reassessment when you purchase the property.
For your purposes, use your tax assessor's estimate of market value to estimate the property taxes, understanding that the tax may change next year when your purchase triggers a reassessment.
Note that Market value is not the same as appraised value, but rather, the tax assessor's estimate of value which may be based on average sale comps in your market in the previous reassement year.
Assessment ratio is 4% for owner occupied and 6% for non-owner occupied property.
Assessed value = Market value x assessment ratio
Property tax = Assessed value x millage rate.
Millage rates vary by county. Under SC state law, property is reassessed every five years. Not all counties in the state are on the same schedule. Addtionally, you may trigger a reassessment when you purchase the property.
For your purposes, use your tax assessor's estimate of market value to estimate the property taxes, understanding that the tax may change next year when your purchase triggers a reassessment.
Note that Market value is not the same as appraised value, but rather, the tax assessor's estimate of value which may be based on average sale comps in your market in the previous reassement year.
Thanks for the detailed response that definitely helps and that could make a huge problem for an investment property if you don't have the right numbers.
You are not giving us all the details. When you moved out, your property tax increased when your assessment ratio went from 4% to 6%. But that alone is not enough to explain the total increase in your tax bill. Some other things that may have also happened at the same time,
your county tax assessor increased (doubled?) the assessed value
your millage rates increased
you lost the senior homestead exemption for an owner occupied property
@Dave Toelkes, I figured he was just looking for an easy comparison of what to expect. There are many other people better qualified to give the full low-down on the tax calculation but here is my best try:
When a owner moves out the assessment goes from 4% to 6%. That property also loses the School Tax Deduction. That was a law passed a few years ago that gives owner occupants a deduction on school district operating costs. So the deduction basically reduces the millage rate. This is for Richland County. I don't know about other counties. Example...
$100,000 taxable value.
$100,000 x 4% (owner occupied) = $4,000 Assessment
$4,000 x .260 (district millage rate) = $1,020 Tax amount
I have been reviewing Richland County Assessor website info on tax rate increase from 4% to 6% because I am a military member who bought a house there then moved away and rented it. I initially thought I would be exempt from the increase because of military orders (out of state), however, we have other rentals in FL where we claim legal residency and receive a homestead exemption plus no state income tax so it appears "legal residency" becomes the determining factor as I understand it. My question is that based on reading the assessor information it appears that LLCs may be able to retain the 4% rate. Is this correct? Does this apply to a non owner occupied rental? Any help would be appreciated. Thanks
Commercial Property Example Appraised Value of Property $ 100,000 Assessment Ratio for Commercial Property x 6% Assessed Value $ 6,000 Total Millage Rate (example) x .200 Property Tax $ 1,200 In certain jurisdictions, the local options sales tax credit is subtracted from the property tax.
Owner-Occupied Residential Property Example Appraised Value of Property $ 100,000 Assessment Ratio for owner-occupied home x 4% Assessed Value $ 4,000 Total Millage Rate (example) x .100 Property Tax $ 400
Residential owner-occupied properties are exempt from school property taxes. Omit the school district millage from the total millage rate to calculate the property tax for this property classification. In certain jurisdictions, the local options sales tax credit is subtracted from the property tax bill.