Those who planned to buy a yacht or go on a European vacation with the money they save on property taxes this year might want to hold off. Chances are, the savings won't amount to a fortune.
In fact, most will see little tax relief; many will see none; and many will pay more in taxes overall.
Expectations for big tax savings were raised last year when the Legislature instituted its so-called property tax relief plan. Property taxes for school operations on owner-occupied homes were eliminated while the state sales tax was raised a penny to help make up the difference in lost revenues.
But this month, as the counties distribute property tax bills, the bonanza many taxpayers had expected hasn't materialized.
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For starters, residents already had an exemption on school taxes on the first $100,000 of the value of an owner-occupied home. That meant that, even before the Legislature passed its tax relief plan, anyone with a home valued on the county rolls at $100,000 or less -- which includes more than 70 percent of all South Carolinians -- would realize no savings on school taxes from the tax reforms.
The median value of a home in York County was $119,000. That means savings on school taxes for most county residents this year will be minimal.
However, everyone will be paying a penny more per dollar in sales taxes. So, residents with homes valued at $100,000 or less are almost certain to pay more in net state taxes this year than they did last year. Renters also will see less benefit from the school tax relief plan but will spend more on sales taxes.
Businesses also will be hard hit. Because of the increase in the sales tax, they will see a significant tax increase in almost everything they buy.
The sales tax is a regressive tax. So, even though the sales tax on groceries was lowered, the burden still will fall most heavily on the poor and moderate-income residents who spend a much higher percentage of their incomes on goods than wealthier citizens do.
Who will gain the most from school tax relief? Owners of expensive homes who have been hard hit by the surge in assessed value of their property. They also were the ones who clamored loudest for this property tax cut. But if you don't own a mansion near the water, don't look for much tax relief.
Legislators touted these tax reforms as a significant tax break for all homeowners. As it turns out, it will be a pittance for most and a windfall for only a few.
Most South Carolina homeowners won't save much as a result of property tax relief.
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