‘Sticker-shocked’: South Carolina’s Tax Law Surprises New Homebuyers

In the tranquility of Indian Land, South Carolina, a couple was left virtually breathless upon receiving their latest property tax bill. Eighteen months after purchasing their new home, Adriana Giglio and her husband were not prepared for the financial hit. Giglio described the moment as being “sticker-shocked”, with the tax bill notably jumping from a previous $2,500 annually to a hefty $4,000 this year.

Unexpected Surge Due to a 2006 State Law

A 2006 state law that altered the calculation of property taxes in South Carolina is now delivering a painful sting to homebuyers. The law has a significant impact not only on newcomers but also on existing residents like the Giglios, who simply needed a bigger home to accommodate their growing family.

“We had our fourth baby in 2022,” Giglio revealed, justifying the need for a larger house. However, unforeseen economic burdens ensued with their upsize. The law from 2006 caps the increase of taxable home value over a five-year duration to just 15%, with an exception made when the home is sold. At this point, the value is reassessed at market value, which has considerably surged in recent years.

Lost Jobs and Unpaid Taxes – A Double Whammy

The Giglios, who both lost their jobs last fall, found themselves in a tight situation as the mounting October property tax bill managed to elude their notice. It was only in the following March, weeks after the due date, that it resurfaced. They sought some leniency in waiving the hundreds of dollars of late fees that had accrued.

However, their repeated requests for relief were met with administrative inertia. Adriana described the frustration, stating, “I was getting the runaround and everyone saying ‘This isn’t us,’ while no one was willing to listen.” In a baffling exchange of blame, Giglio found herself tossed between the county and the state, with the South Carolina Department of Revenue stating that they only administer the income tax and not the real estate tax.

A Quest for Flexibility in Assessing Penalty Fee Waivers

At a county level, officials claimed their hands were bound by South Carolina law, which doesn’t provide individual counties the autonomy to grant penalty fee waivers minus a filed extension. Lancaster County’s deputy administrator, Stephany Snowden, expressed empathy for the Giglio family but reaffirmed the county’s obligation to adhere to the state’s guidelines for handling tax collection.

“We are extremely empathetic to everything they are going through, it isn’t that we are being cold,” explained Snowden. “We have to follow how the state wants us to handle tax collection.”

Long Road to Fairness

This episode calls into question the unintended fallout of the 2006 tax law. As the housing market remains robust, there is a pressing need for policy reforms at the state level to mitigate the disproportionate tax burden on homebuyers. As the Giglios adjust to their new reality, their story underscores the imperative for a more responsive and flexible system that respects taxpayers’ realities and acknowledges their challenges.