The Homestead Exemption, a substantial property tax break primarily for South Carolina homeowners 65 and older, has been around since 1972, but countless thousands of state residents are missing out on money they could be saving.
That's because the tax break isn't automatic, but instead requires submitting a onetime, one-page application to the county auditor.
The rules are pretty simple, and here's why the Homestead Exemption is valuable. It eliminates the first $50,000 of the taxable value of an owner-occupied home. The savings vary by county and municipality, but in Charleston County, for example, that's estimated to be worth roughly $225 a year.
So some homeowners may not be aware of it. Others may not think to apply when they reach 65, or reapply after they move, or after the death of a spouse.
In Charleston County alone, roughly 4,600 homeowners are believed to be eligible for the exemption but are not receiving it, according to county auditor Peter Tecklenburg. If you're among them, you probably just received a letter from his office to let you know.
The Charleston County Auditor's Office has done what, apparently, no other county has. It took the trouble to compare its list of owner-occupied homes with voter registration lists that include the ages of the owners. Then, they sent letters to anyone 65 or older who isn't receiving the homestead tax break.
Those letters won't reach everyone in Charleston County who might qualify, because they were based on voter registration and many people aren't registered to vote. But it's a commendable effort to make sure people get the tax savings they are eligible to receive.
For most South Carolina residents, it's up to you to be aware of the tax break and apply for it. Reminders from the government that you could be paying less are uncommon.
Getting the tax break doesn't mean there will be less money for local governments and schools, because it's a statewide benefit. If local governments lose revenue because of the exemptions the state makes up the difference.
Once approved for the Homestead Exemption, you get the property tax break every year that you live in that home. Here's a look at the rules, assuming someone were to apply in 2019.
- The property must be an owner-occupied home, for tax purposes. Owners of multiple-owner heirs' properties could still qualify, but should call the auditor's office to inquire, because that gets more complicated.
- At least one listed homeowner must have been 65 or older as of Dec. 31. For example, if a married couple jointly owns the home, only one of them needs to be 65 or older.
- The applicant must have been a South Carolina resident for a year or more, as of Dec. 31.
- Blind and/or completely and permanently disabled homeowners qualify, too, regardless of age.
- If you wouldn't qualify, perhaps because you're too young, but were married to someone who had been approved for the exemption before they died, then you could qualify.
The best thing about this tax break is that you get it year after year, after applying once.
It's important to remember that the Homestead Exemption is tied to the qualifying person and the property they occupied when they filled out the paperwork. So, if a person moves, he or she has to apply again. And if a joint owner who qualified for the break dies, the surviving owner would need to apply.