Well, my last post didn't get quite the response I had hoped it would so I thought I might skin it down a bit and give you guys just basics.
Now, seeing that "Approx. 67% of our sales-especially in condos---are to the non perm. Resident who are assessed at 6% versus 4% for the perm res; All of this leads to a pretty good deal for the permanent resident (taxed at 4%) but not so good for the commercial, second home, or rental investor (taxed at 6%)"
I'm assuming (which I very much dislike to do) that the above statistics are based on Horry County and not State wide sales. I pulled this information from the public Tax Forum that took place October 18, 2007. I have the complete minutes of this forum on my previous post "If anyone is interested!!".
School millage only comes off 4% owner occupied permanent residence. Not commercial or second homes 6%.
•A. Pre 2007 Owner Occupied---4%--$200,000 house -- Assessed at $200,000 x 4%=$8,000 x .1760 = $1408 (.1760 is 46.3 county millage plus 129.7 school millage). With no 1% sales tax!
The millage rate for 2008 will be approx. 115.3 mills for school operating and 47.3 mills for the county or .1626 compared to the .1760 for 2007.
Now -Sales price $200,000 x 4%=$8,000 x .0463=$370.40 ( No school millage)- savings of 1037.60 Plus the 1% sales tax
•B. Commercial/second home 6% Pre 2007-Assessed at $200,000 x 6% =$12,000 x .1760=$2,112 With no sales 1% tax
Sold to new investor-(Assuming property was worth $200,000 in 2004 and was now worth $400,000). Sales price $400,000 x 6%=24,000 x .1760=$4,224 Plus the 1% sales tax
Huge disparity of taxes being paid on a like unit by an owner occupied unit (4%) not selling the property, and a non owner occupied (6%) property that was sold and is now at sales price.
Example from above:
Owner Occupied---4% owner doesn't move. Now pays 1% sales tax. Assessed 2004 at $200,000 -at 3% per year house would have been assessed at $218,545 in 2007.
Under new law taxes for perm res. would be: $218,545 x 4% = $8,742 x .0463 (County millage only)=$405 plus 1% sales tax
New Investor Occupied-6%. Same unit sold to investor in 2007 for $400,000.
Under new law taxes for investor would be: $400,000 x 6% = $24,000 x .1760 (County plus school millage)=$4,224 Plus 1% sales tax
Difference of $4,224 minus $405 or $3,819 to the investor - a 1,043% increase
School millage is staying on non owner occupied (6%) commercial & second homes---most of these people have no children in the schools---they are not perm. residents and they, and their tenants, are paying the 1% sales tax while the are in Myrtle Beach..
So, I pose these questions:
Is this, a realistic change to our State taxes?
How does this formula of property taxation compare to others throughout the country?
Any insight anyone would like to share would be greatly appreciated
I just recently loss a potential sale of a Condo due to these new tax changes. My clients stated that there would be no Tax advantages for them unless they put a substantial down payment or just purchased for cash outright. Now, most of us know that purchasing a property for cash is not a common practice!