iPleaders

An insight into the South Carolina property tax for senior citizens

September 30, 2021
514 Views

This article is written by Aastha Verma, from Kalinga University, Raipur, Chhattisgarh. It describes the Property tax in South Carolina and the special provisions to it for senior citizens. 

Introduction

The property tax law of South Carolina aims at providing property tax relief to the homeowners because of which it becomes complex, nontransparent, non-competitive. A general property tax is applied to all property uniformly and evaluates the effect of a five years reassessment cycle on the equity of the property tax. Adopting any tax policy involves trade-offs and citizens of each state and local government are the best to choose the policies through which they can achieve their aims. The property tax liability is reduced by the fees in lieu of a tax programme, which leads to new jobs and investments in the state. Local governments’ ability to raise money is hampered by the importance of property taxes and base erosion. The property tax represents 27% of total revenue in South Carolina. The burden of taxation is distributed but is not always equitable and efficient for the citizens. 

South Carolina and the perception about property tax

Salient features of property tax 

  1. Property taxes are different from other forms of taxes as they change frequently.  Every year the local government sets the property tax based on the revenue needed for the value of real estate.  
  2. There are different types of property that can be taxed. The broad categories are-
  1. The property tax is a salient tax that is billed annually unlike the income and sales taxes.
  2. When the budgetary requirement remains the same and property is removed from the tax base, the other rate increases with the remaining property. If rates are not increased then, the government will fail to meet its revenue goals for service provisions. 
  3. The property tax provides a more stable revenue source as the property values are stable.
  4. The State utilizes a classified tax system in which property is classified based upon its use and tax differently.

A look into South Carolina Property Tax for Senior Citizens : the key aspects 

The State of South Carolina has special provisions for the age group of 65 years or above or the one who resided in the state for at least one year. When the deceased spouse was above the age of 65 and the other spouse was over the age of 50, the person is eligible for this benefit. The benefit is known as the Homestead Tax Exemption. It removes the part of home value from the taxation, which lowers the taxes of the person. It is a complete exemption on taxes on the first $50,000 in the fair market value of legal residents above the age group of 65 years. It also applies to the residents with disabilities and who are legally blind.

Accessing the exemption 

To receive this exemption by July 15 of every year it would be initially claimed at the auditor’s office. If the person is unable to go there by themselves then they can authorize someone to make an application on their behalf. They should have some valid form of documents for age proof like birth certificate, medicare card or license in which age is mentioned. Also, there will be a probability that the whole income tax will be deducted if someone itemized deduction in the federal returns. They do not need to reapply annually but only in the case of the death of an eligible owner or when they move to a new residence. The surviving spouse receives the Homestead Tax exemption benefit if the spouse meets all the following conditions –

If someone moves to South Carolina they can get the Homestead tax exemption benefit. If –

The state and the local Government likes to attract retirees as they don’t demand facilities of the field of school, police and other local services. In Palmetto, Colombia and South Carolina, the senior citizens have to pay very little or even no tax for the State, this helped them a lot financially. In 2018, more than 450,000 residents were exempted from the property tax through the Homestead Program. 

Way ahead for South Carolina with property tax for senior citizens 

Not all elderly people are on a fixed income as some have businesses and others have private jobs. Elderly people have less income than younger families that’s why the State of South Carolina is providing relief to retirees. The senior citizen’s income is stagnant and they are usually living on a fixed income even after hiking all the basic amenities which include their taxes, food, gas, medicine etc. Sometimes they have to decide whether to purchase medicine or to pay the taxes. So this step taken by the government is helping the individuals tremendously. The government thinks that money should be used for the most vulnerable population who needs it the most and this is the best way to help the individuals in maintaining their houses. 

South Carolina political institutions 

Property tax must be understood within the large framework of public revenue. The South Carolina Republican Party is anti-tax and supports less progressive taxation, reduction of income tax, no new tax which helps provide context for the state policy. The party thinks that an ideal tax system generates enough income while dispersing the tax burden in a very simple and cost-effective manner. Because it distributes taxation based on fair market value, a broad-based tax system is more stable and has the capacity to develop as a population and inflation.

Problems faced by the citizens of South Carolina

Conclusion

The State of South Carolina is based on two forms of property tax expansion, one for non-profit organizations and the other is for senior citizens. Also, it is the 9th ranked state in Kiplinger’s ranked list as it has less property tax for retirees. Also, the same scheme is provided to the people who are permanently disabled and are legally blind. Various hospitals have provided social services in their clinics and treatment for the city employees. As the senior citizens have limited income, this initiative taken by the government helped them financially. Also, the government believes that money should be used for the most vulnerable group who require the money and the senior citizens are one of them. The special provisions for senior citizens are helpful but because of low property tax, the government does not have enough money to provide better education facilities, infrastructure and to repair the roads and bridges which is a negative impact on the state of South Carolina. Property tax provides taxation based on the fair market value. 

References 

  1. https://dor.sc.gov/lgs/homestead-exemption
  2. https://tigerprints.clemson.edu/cgi/viewcontent.cgi?article=2724&context=all_dissertations
  3. https://www.lincolninst.edu/sites/default/files/pubfiles/deep_dive_on_scs_property_tax_system-volume_2.pdf

LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.

Exit mobile version