Millions available for property tax relief. Will SC homeowners pay less next year?
Homeowners in the state may see a reduced property tax bill later this year, under a House budget proposal.
House budget writers want to distribute $500 million in saved sales tax revenue that has accumulated since 2020.
In 2006, the state sales tax increased to 6% from 5% in exchange for cutting property taxes on owner-occupied houses in half. However, money in the property tax relief fund has accumulated to $600 million since 2020, the first year the account had a surplus. Because only $100,000 in surplus dollars had been accumulated at that point, the relief would not be noticeable to homeowners.
The $500 million would go to counties based on population and counties would then credit money to property taxpayers.
The remaining $100 million would stay in the property tax fund as a way to smooth out the expense of the relief and in case sales tax revenue drops.
The relief will be noted in October tax bills, for payments due in January 2025.
The one-time property tax credit would range from $277 to $472, according to estimates completed by the Revenue and Fiscal Affairs Office.
Gov. Henry McMaster initially proposed in his executive budget that $500 million be used to address aging bridges in the state. But the South Carolina Department of Transportation only asked for $200 million for bridge modernization during this year’s budget process and House budget writers agreed with the smaller amount.
“When we looked at the the original purpose of the (homestead exemption) funds was for property tax relief, and it felt like that was a responsible thing to do. So that’s what the dollars were originally designated for,” said House Ways and Means Committee Chairman Bruce Bannister, R-Greenville.
The plan, proposed by the House Ways and Means Committee, is slated as a one-time tax reduction. As additional sales revenue comes in, the budget writers anticipate the money would be allocated for a second year.
“Then, we would find a way to continue to do that every year thereafter based on the surplus collections,” Bannister said.
The plan still needs to be approved by the full House of Representatives and then go to the Senate for consideration, which will start with the Senate Finance Committee run by state Sen. Harvey Peeler, R-Cherokee.
“If it benefits the taxpayer, I’m all in,” Peeler said.
Peeler declined to share specifics on how the Senate Finance Committee may approach the proposal but hinted he may want consider a larger property tax rebate.
“I’ve said before you can’t out cut Harvey Peeler when it comes to cutting taxes,” Peeler said.
This story was originally published February 28, 2024 at 5:30 AM.
