Hilton Head lowers real estate tax rate, but will it lower your total tax bill?
The Town of Hilton Head Island announced Wednesday it approved a reduced millage rate to counter increasing property values.
During a May 3 town budget presentation, Town Manager Marc Orlando indicated he expected the town to lower its millage rate as the then-ongoing property value reassessment progressed. Some property owners will likely see their assessed value increase due to the strong real estate market. In its simplest form, real estate taxes are determined both by millage rate and assessed value of the home.
With property values across the island increasing, property owners’ municipal taxes would also increase if millage remained the same. The town elected to reduce its millage rate from 23.1 to 21.4 mills, reducing the likelihood owners will see higher town taxes this year. Different county and school district millage rates, for example, could affect a property owner’s overall tax bill.
The reduction won’t negatively impact the town’s revenue, Orlando said in a Wednesday press release.
The millage is the amount per $1,000 used to calculate taxes on property. One mill equals 1/1000 of a dollar or 1/10 of a cent.
For example, if the tax rate is 21.4 mills, multiply .0214 by the assessed value (the property value times the assessment ratio) to determine the amount of municipal property tax due. The assessment ratio is either 4% or 6% depending on whether the property is a primary or secondary residence.
If a home’s assessed value were $500,000 and it was a primary legal residence, the equation to determine how much tax a homeowner would pay to the town of Hilton Head would be:
.0241 X 500,000 X .04 = $482
If a home’s assessed value were $500,000 and it was their second home, the equation would be:
.0241 X 500,000 X .06 = $723
