In addition to beautiful places and friendly people, there are many financial benefits to living in South Carolina. We want to highlight the main financial items South Carolina residency has to offer, with an emphasis in York County.
If you buy a home in South Carolina and it is your primary residence, there are ways to save on your property taxes:
This entitles the homeowner to a reduced property tax of 4% from the normal 6% rate. To apply this to reduction, you must go the County Assessor’s Office and fill out the application. It can be done anytime during the year.
This exempts the first $50,000 of value of your primary residence from property tax. You must be age 65 or older (if married only one has to be 65), have lived in your home for one calendar year, and be a South Carolina resident. You need to apply at your county Auditor’s Office.
South Carolina levies personal property tax on vehicles and boats annually. However, unlike
many northern states, when you buy a vehicle in South Carolina you pay a maximum of $500 in sales tax. It takes approximately 3-4 years of paying personal property tax to equal what the sales tax would have been if it were assessed on the whole purchase price. As a newcomer to South Carolina, if you have 45 days to pay your vehicle property tax and get a South Carolina license plate and driver’s license
.
South Carolina state sales tax is 6% plus the counties can add more.
For example, York County adds 1% for a total of 7%.
South Carolina has a progressive tax rate structure that tops out at 7%
very quickly. South Carolina’s income tax is based on Federal Taxable
Income, however allows the following subtractions:
South Carolina excludes Social Security income from being taxed.
Seniors age 65 and older get a $15,000 exclusion from taxable income ($30,000 for married seniors). Seniors under 65 get a $3,000 exemption from qualified retirement income only.
South Carolina allows a 44% exemption on net long term capital gains.
South Carolina excludes out-of-state rental or business income from being taxed.
Eligible South Carolina business income may be excluded from being taxed at 7%, and instead may be eligible for a max 3% tax rate.
South Carolina allows an unlimited income tax deduction for contributions to its 529 Future Scholar College savings program. If you have a 529 plan set up in another state, it is possible to roll it over into the South Carolina 529 Plan and get a tax deduction.
If you move to South Carolina in the middle of the year, you must file a South Carolina tax return. Instead of a partial year resident return, you must elect to file either as a full year non-resident or a full year resident. If you want the lower special property tax assessment on your primary residence for this partial year, you must file as a full year resident. You may want to wait and start your South Carolina residency in the next year if you had high earnings in a low income tax state. If you pay tax in another state and the same income is taxed in South Carolina, then you will get a tax credit for the non-South Carolina tax paid.
South Carolina is one of the few states that allow the scale and purchase of
certain tax credits between taxpayers. There are established exchanges that
enable taxpayers to buy these credits at a discount. We are able to assist
our clients in purchasing credits.
South Carolina has no estate or inheritance tax, however you estate will need to be probated if it exceeds $10,000 in probate assets. There is planning that can be done to minimize or even eliminate probate.
We recommend that if you have a will from your previous state of residence, that you have it reviewed by a South Carolina attorney to make sure it still does what you intended it to do. It is also important to create new power of attorney documents for property and health care in South Carolina. Old powers of attorney from other states may not not be effective once you become resident in South Carolina.
One of the least known benefits to seniors age 60 or older is free college tuition at all state supported institutions (e.g. Winthrop University or York Tech). If you have always wanted to learn about a subject that interest you, now is your opportunity.
Another benefit to seniors age 65 and older, is a 50% discount on the South Carolina State Park Passport. The Palmetto Passport allows you access to all the state parks.
If you like to fish and hunt and are age 64 or older you can apply for a lifetime fishing and hunting license for just a one-time fee of $9. If you plan on fishing in Lake Wylie, which straddles North and South Carolina, you need licenses from both states.
Schedule your complimentary consulation.