How SC tax law could get even worse for 2nd-home owners

A brief heads-up to Realtors, developers, and those hoping to sell their home. At the moment, there is proposal in Washington to eliminate the federal income tax deduction on “taxes paid.” Fair enough on the surface, but not really.

“Not really” because South Carolina taxes second homes at 50 percent more than owner-occupied homes. It is a significant penalty. Therefore, the pain of that federal tax change on a South Carolina second home will be far greater than the pain in a second-home friendly state that taxes second homes at standard rates.

It is not complicated math, and buyers will figure it out.

Here is my confusion: I came to Beaufort, invested a fair amount of money in the community, provided jobs for maybe 15 people for a year or so during construction, buy my groceries at Food Lion, buy my stuff at local businesses, don’t rent out the home, and yet I am deemed a “chicken to be plucked.” In essence, I am charged 50 percent more in taxes because I only use county services 50 percent of the time.

I ran a tax comparison the other day: Beaufort vs. Highlands, N.C., an old mountain town with housing prices comparable to Hilton Head Island and Beaufort, high-end amenities and daily temperatures 12-15 degrees cooler in the summer. On a property of comparable value, the property taxes on a second home in Highlands were about one-fourth the property taxes on the same second home in Beaufort.

As they say, “If something cannot go on forever, it will stop.”

This story was originally published May 12, 2017 at 2:48 PM with the headline "How SC tax law could get even worse for 2nd-home owners."