South Carolinians may soon receive a Property Tax Relief credit, per a House budget proposal. Under the proposal, homeowners in the state could see a reduced property tax bill later this year. House budget writers intend to distribute $500 million in saved sales tax revenue that has accumulated since 2020.
The state increased sales tax from 5% to 6% in 2006 to cut property taxes in half for owner-occupied homes. However, since 2020, the Property Tax Relief fund has accumulated $600 million, and the surplus has only been $100,000 before that. Only a tiny surplus had been collected earlier, so the relief was not noticeable to homeowners.
The $500 million would go to counties based on population, and homeowners would receive the credit through their accounts. The remaining $100 million would stay in the Property Tax Relief fund to smooth out the expense of the relief and for future use in case sales tax revenue drops.
The credit will be noted in October tax bills for payments due in January 2025. The one-time Property Tax Relief credit would range from $277 to $472, according to estimates completed by the Revenue and Fiscal Affairs Office.
Initially, Gov. Henry McMaster proposed using the $500 million to address aging bridges in the state. Still, during this year’s budget, the South Carolina Department of Transportation requested only $200 million for bridge modernization. House budget writers agreed with the smaller amount, and most of the saved revenue will go to Property Tax Relief.
“When we looked at the original purpose of the (homestead exemption) funds, it 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 is a one-time tax reduction proposed by the House Ways and Means Committee. As additional sales revenue comes in, the budget writers anticipate that the money will be allocated for a second year. Then, they would find a way to continue to do that every year after that based on the surplus collections.
The plan still needs to be approved by the full House of Representatives and then go to the Senate for consideration, starting 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 that he may want to consider a more significant Property Tax Relief rebate. “I’ve said before you can’t output Harvey Peeler when it comes to cutting taxes,” Peeler said.
The proposal is excellent news for South Carolina homeowners who may see a reduction in their Property Tax bill later this year. The changes will provide a much-needed relief to the taxpayers, and the saved revenue will go towards the purpose for which it was intended – Property Tax Relief.
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