Ah, yes. Property taxes. If you haven’t had the pleasure of paying property taxes yet, it might seem a little confusing how it all works.
Luckily, we came up with a pretty straightforward answer for you. This article will explain how homeowners will be taxed in Georgia and South Carolina.
As we get into more detail later on, it will be vital for you to know what these terms mean and how they will affect your taxes next year.
The millage rate is the rate your local government will tax you. This percentage is determined by mills, which is the formula your county will tax you. This percentage uses your home’s assessed value to determine the rate at which you will be taxed. One mill is one dollar per 1,000 dollars of assessed value.
The assessed value is the value your local government determines your home’s value. A municipal property assessor usually does this, and they base their estimate on one of three figures: the appraised value, the market value, or both.
The assessment rate refers to the rate your property will be taxed. Unless otherwise specified, properties are assessed at 40% of their fair market value in Georgia. Exemptions, such as a homestead exemption, reduce the taxable value of your home.
The market value of your house is what your home would go for if it were to go on the market right now. It’s important to note that this figure is solely based on supply and demand. Therefore, this amount will vary from time to time.
Fair Market Value
Fair market value is essentially the true value of your home. This number will, in most cases, stay put. Of course, this number would most likely increase if you were to do any repairs or additions to your house.
Property Taxes in Georgia
All right, let’s get into detail. First, you should know that property taxes are ad valorem taxes, which are taxes based on the value of an item (e.g., real estate, boat, or car). Most states list property taxes under that umbrella term.
In general, property taxes in Georgia are relatively low but slighly higher than in South Carolina.
The average effective property tax rate in Georgia is 0.81%. Columbia County’s property tax rate is 1.08%. Richmond County is 1.05%.
Your property will likely be assessed at 40% of its fair market value in Georgia. That means if your home’s market value is $250,000, the assessed value is $100,000.
Formula to calculate Assessed Value:
$250,000 X 0.40 = $100,000
From there, the tax rate will be calculated based on the number of mills, which are equal to $1 of taxes for every $1,000 in assessed value.
(Assessed Home Value) $100,000 X (county tax rate) 1.080% = $1,080
$100,000 x 0.0108 = $1,080 property taxes
(Assessed Home Value) $100,000 X (county tax rate) 1.050% = $1,050
$100,000 x 0.0105 = $1,050 property taxes
Georgia property taxes are about $800 less than the national average.
Property Taxes in Aiken, South Carolina
Properties are taxed at 4% of their taxable value. However, you will only receive that rate if you live in that home and claim it as your legal residence. Otherwise, you will be taxed at 6%.
Your second home will be taxed at 6%.
Your vacation home or investment property will be taxed higher than your legal residence.
Your tax assessment = your appraisal X the tax rate. This is what you will pay for that property in taxes.
Your county sets the millage rate.
So, your house (legal residence) is worth $100,000.
$100,000 x 0.04 = $4000
Now, we take the current millage rate for your county. In Aiken County, it is currently 60 mills or .060.
$100,000 X 4% = $4000 X .060 = $240.00
The City of Aiken provides a full breakdown to help you estimate your taxes. https://www.cityofaikensc.gov/taxes/tax-calculation/
South Carolina property tax rates are some of the lowest in the nation.
How to Lower Your Property Taxes
A homestead exemption reduces the property taxes you pay on your legal residence. It works by lowering your home value for the tax assessor to base your assessed tax value. Each county or city where your home is located will have different applications and required documents to apply.
Homestead Exemption, South Carolina
In South Carolina, to receive a homestead exemption on your primary residence, you must be 65 years or older, legally blind, or permanently disabled. You must have lived in South Carolina for one whole calendar year.
Regardless of age, health, or veteran status, homestead exemptions are unavailable on a second property.
Tax relief programs exist for veterans, surviving spouses of deceased veterans, Medal of Honor recipients, and POWs. However, there’s a list of criteria you must meet before applying.
Homestead Exemption, Georgia
In Georgia, you also won’t be able to get a homestead exemption on your second property. However, various programs are available for disabled veterans, individuals 62 years and older, surviving spouses of US service members, and even surviving spouses of peace officers or firefighters.
To receive homestead for the current tax year, you must submit your application for homestead exemption before the deadline for filing tax returns.
Property Taxes Might Seem Intimidating
As a new homeowner, you might look at all this and be slightly intimidated. But remember that your sole responsibility here is to make sure you pay your property taxes on time. And if you think you qualify for assistance, such as the homestead exemption, fill out that application.
Taxes might seem intimidating, but once you know how they work, they become less intimidating.