are 4-6% property taxes suppose to be normal??

Question

So it says my first home property tax will be 4% and 2nd 3nd or how many properties that I buy in South Carolina will be 6%. Isn't that very high? is this only in south carolina? which charges more property taxes on investment property?

Because my mom, who lives in columbia, SC had a house which was around 130,000 and bought 2nd house which was around 350,000. when she first moved to the 2nd house, the mortgage was only 1700/month. but later the home became 2nd mortgage the monthly payment, because of the taxes monthly escrow became 4000/month. which seemed crazy. is it suppose to be like this?

how about atlanta? florida or big cities are they similar?

Jay Hinrichs · Answer

@Nate Watkins  NP... I buy property in about 20 states so I get the bills..

notoriously high are

1. IL

2. PA

3. TX

In Oregon you can also have timber land tax deferral and ag deferral..

I owned 700 acres out in Willimina worth over 3 mil. and my tax's were less than 2k a year.

you pay tax when you harvest the tree's a once very 60 year event..

I am in Lake O and my property is right at 1 mil and my taxs are 9k.. for instance.

Richard Balsam · Answer

Sometimes the tax assessors office gets things wrong. It's almost impossible to get every house assessed value correct- every year. I've had a few houses  that were valued wrong. Visit your courthouse in the county. Speak to the tax assessor's office- they will explain the process. Usually, fill out a form and wait. And wait, etc. They will eventually arrive at a "fair" value - that they determine. I never agree to this number. In fact, I fight every high tax number - and win every time. Here's how:

In most larger cities, there is usually at least one CPA firm who's main function is to fight for property tax values. You hire them, and they get to work. They know the board of equalization ( or whatever the name is in your county). They research comps, taxes paid, etc - to arrive a number they feel is "right" for the value of your home. They have every incentive to do this for the maximum savings, based on their "commission plan".

The company I use costs the following: 1. Choose between three different payment plans to them. I choose the "middle" plan which costs me $150 whether they win or not + 1/3 of any savings in year one. This pays for their time up front + incentive on the reduction amount. When they win, I pay them ( based on the middle plan I chose) 33% of the 1st year savings, and keep years 2 & 3 tax savings. In Georgia, the new assessed value remains the same for three years (unless a major change is requested by the county). So - if my taxes drop $500 per year - I pay them $150 + (1/3 of $500) = 316.66: So in year one: I pay them $316. My savings will be $500-316=$184 -  not great. But...my savings in year two: $500. Savings in year three: $500. Total cost: $316. Savings over three years: $1166. ROI: 27%. I have had different two homes' tax savings last year of $650 and $450. Was it worth it? Of course. I couldn't do this myself- and wouldn't take the time to try it - let a professional do it that knows how.

In your case - since the taxes seem extreme - your cost to do this would be higher- based on the savings - but will still be worth it. Find a service like this near you. There has to be at least one CPA firm that fights for homeowners. Just ask around or google it.

David Dec · Answer

According to a recent ranking of median property taxe rates by CoreLogic's Data Team, Illinois is highest at 2.67%, Hawaii is lowest at 0.31%, New York at 2.53%, Texas at 2.17%,  Florida at 1.32%, California at 1.12%, Georgia at 1.10%, and South Carolia at 0.71%.

Average tax rate across the entire country is 1.31%, so a homeowner of a $200,000 home would pay $2,620 in property taxes.

I tried to copy and paste the entire table but couldn't do it from my iPad Pro.

Nate Watkins · Answer

Yeah that's a 3.3% effective rate. It's still really hard to compare from state to state because of all sorts of other taxes. For example, property tax in Oregon is really high, but there are no consumer sales taxes. Some states don't have income taxes as well.

For what it's worth, in Atlanta I pay about 2.5% effective sales tax on my primary residence.

Joel Owens · Answer

There are certain states like Texas that have no income tax so property taxes are higher to offset.

If you own SFR or multifamily for investment you better include the high property taxes into your numbers or you will surprised at the return.

With commercial specifically we can bill back the tenants with retail strip centers and they pay the high property taxes.

As for the appraisers doing the desktop process without leaving the office I am finding in many parts of the country that is not the case anymore. The reason is with values rising in many areas counties and cities are sending out letters saying so and so will be in your area on this date and have a form to fill out. They are on the hunt for money now when in the down turn they were keeping taxes flat because if they raised backed then almost everyone appealed because they were hurting with the economy.

Some of my clients have some ongoing appeals right now and the properties are in the tens of millions so the taxes are substantial.

Jesse Waters · Answer

@Jacob Song Not that taxes are really high compared to other places its just something to be aware of.  Since I live in SC and like having my properties near by I am careful about making sure I purchase on the good side of city/county lines.  So long as you are aware of what the taxes are before a purchase, plug them into the numbers and see if it works.

I work with some guys from Texas who pay significantly more for a similarly valued house as I pay on my residence, 4-5 times more in fact.  I also have a property in VA and there is no difference in tax rate for owner occupied vs rental.

Jacob Song · Answer

@Jesse Waters Thanks :) I guess government of SC doesn't want people to be investing in real estate. I would rather invest in another state where the tax is lower and population is higher(FL,GA, ETC..)  It is just ironic that on the list of property tax rate SC just comes out at 0.71% when it is a lot more higher than that. Thank you

Jesse Waters · Answer

Yes, taxes in SC seem high, especially when compared to other place.  The big kicker that I have run into in SC, is not only is the percentage higher the way in which the actual tax is calculated is different for a rental/2nd home vs primary residence.  Generally speaking, in my county the tax on rental's is about 3-4 times higher than if it was an owner occupied property.  For instance, I have a SFR in Aiken that was taxed at $350/yr before I purchased it from an owner-occupant, my annual property tax is now about $1300 and the house is worth $100k.  My house in the same county is worth about $290k with $1100 in annual property taxes.

I have passed on a number of properties because of the tax implication after converting them to rental properties, particularly in Columbia, SC where dealing with City & county taxes both at the non-homestead higher tax rate simply murders cash flow.

Alex Franks · Answer

Jacob send me an PM I I can send you our new construction homes( turn key rentals).I am not selling these. There is another company but I can send you the tax breakdown for thes to compare as well.

For SC markets the only markets we determined to build turn key rentals are Greenville and Columbia SC because of the taxes. The company selling them has sold 20 of the first 36 with only 10 being built , so we can see the demand for this product.

Hope all is well

Alex

are 4-6% property taxes suppose to be normal??

Most Popular Reply