All three counties in the Charleston metro area are reassessing properties this year or next year, and for some residents, that's likely to cause property tax bills to bounce up and then down.
Property taxes and reassessment are confusing for many property owners, but for those in towns and cities that span multiple counties, tax bills can be downright baffling.
Cities and towns in the area have been expanding their boundaries for many years through annexation, and some now straddle multiple counties. And in municipalities that cross county lines, tax rates must be adjusted when any one of the counties in the town or city limits conducts a reassessment.
Those who own property in the section of a municipality that gets reassessed first - this year that would include the Berkeley County sections of Charleston and Summerville - are likely to see higher municipal tax charges until the county on the other side of town also reassesses property.
Mac McBride, of Daniel Island, remembers what happened the last time Berkeley County updated the property values used for calculating tax bills, in the 2009 reassessment.
"We really got creamed," he said. "Our Charleston city taxes jumped."
Here's why: When counties update property values through reassessment, the tax base typically gets larger, and governments are required by state law to lower their property tax rates to account for having more property value to tax. But if only part of a city is in the county that reassessed, the city's tax rate gets adjusted based on changes to the city's entire tax base, which dilutes the tax rate reduction and spreads it across the city.
When the neighboring county is reassessed, the process is then reversed.
So, Daniel Island and Cainhoy residents will likely see their Charleston city tax bills rise this year because of Berkeley County's reassessment, then fall next year when Charleston County reassesses property and the city adjusts its tax rate again.
"It becomes a weird thing," said Charleston County Assessor Toy Glennon. "It (the city's tax rate) does get rolled back, just not as much as if everything was in the same county."
In Summerville, where the town boundaries extend into three counties, Finance Director Belinda Harper has already been through one round of multiple county reassessments, and having to sort out changes to the town's tax rate.
"I was an experience I did not relish," she said.
The obvious solution would be for counties to reassess property in the same year, but that's not possible under current state law.
"If there were an easy solution, we could have fixed it," said Melissa Carter a researcher and legislative liaison at the Municipal Association of South Carolina.
The good news locally is that Charleston and Dorchester counties will both reassess property next year. That means there will be no tax rate disconnect in North Charleston, which has residents in Charleston and Dorchester counties, and Summerville will see both other sections of the town reassessed in the same year to catch up with Berkeley.
The last time around, there was a two-year gap between reassessments in Berkeley and Charleston counties - counties are allowed to delay a reassessment by one year - resulting in two years of higher city taxes for Daniel Island.
"There was a two-year gap, and then Charleston reassessed and the taxes didn't go down much," said McBride, who notes that real estate values had changed quite a bit in the two years between the county reassessments.
"If I worked for the mortgage company, I would probably be confused," said Steve Bedard, Charleston's chief financial officer.
That's because banks need to adjust escrow payments when property taxes change.
Bedard said all Charleston property owners should see a small city tax decrease this year because of Berkeley County's reassessment. On Daniel Island, that decrease won't make up for the higher property assessments, so city taxes will rise there.
"We can only have one (tax) rate for the city," Bedard explained. "The taxes will come down more in Berkeley County when Charleston County reassesses, but that will take a year."
Reach David Slade at 937-5552
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