Qualifying prospective and current South Carolina residents could benefit from a property tax exemption. Basically, an exemption means free from property taxes. Fortunately, there is a great property tax savings for SC homeowners who are over 65 years old, totally and permanently disabled, or legally blind. Meeting these criteria could mean using the lifetime Homestead Exemption SC program. That’s right, lifetime! Which means, once qualified for the exemption, homeowners do not have to continually apply each year.
How Much is the Homestead Exemption SC?
The SC Homestead Exemption is not totally free property taxes for most properties. But, it is an exemption for the first $50,000 in property tax fair market value. Besides the requirements mentioned above, the property must be a primary residence. Additionally, it must be considered the homeowner’s legal residence by the SC county which the property is located.
Home Exemption SC Requirements
In order to qualify for free property taxes up to the first $50,000 in tax market value, there are specific requirements. The following must apply based on December 31 for the preceding year…
- Must be the deed owner, life estate, or beneficiary to trust holding title, and
- Legal resident of SC for one calendar year, and
- 65 years old, or
- Totally and permanently disabled by a state or federal agency with the ability to determine such, or
- Certified legally blind by a licensed ophthalmologist
So, SC buyers cannot take advantage of the property tax exemption right after closing. Because of the the preceding year requirements mentioned, it could take up to a year prior to exemption application.
How to Apply for SC Homestead Exemption
Assuming a homeowner believes he/she qualifies for the tax exemption, there is a process to the application. First of all, every South Carolina county participates in this tax exemption. In order to apply for the Homestead Exemption, homeowners should gather the required documentation and provide it to their local county auditor’s office.
Homestead Exemption Required Documentation
- SC driver’s license or birth certificate (if applying for being 65 or older)
- Documentation proving disability from federal or state agency (if applying because of disability)
- Certification of blindness from licensed ophthalmologist (if applying because of blindness)
- Copy of trust agreement (if the home the home is in a trust)
There are a couple other potential advantages when it comes to the Homestead Exemption. For instance, a SC resident who is selling a current qualified residence and buying another one could continue the exemption. Additionally, a surviving spouse who is on title within 9 months after the qualifying spouse’s death, continues to occupy the home, and remains unmarried, may receive the tax exemption.
Ways to Buy a Home in South Carolina
In order to get a property tax discount, you need to buy a house first. Please note that residents with or without a mortgage may apply for the tax exemption. But, let’s talk about some awesome home loan programs which allow prospective buyers to become homeowners with little to no money down.
South Carolina VA Loans
To begin with, there are a lot of military Veterans throughout South Carolina. Veterans not only have access to the no money down benefit of VA loans, but these helpful loans provide much more. Examples include having two VA loans at once, VA funding fee exemption, buying a condo, low credit scores and higher debt ratios.
South Carolina USDA Loans
Fortunately, most of South Carolina is USDA eligible. That means looking at the SC USDA eligibility map, there is a whole bunch of no money down eligible properties. Buyers who compare USDA vs FHA find so many advantages of this product. These include cheaper costs, PMI, and maybe most important, no down payment.
South Carolina Down Payment Assistance
For qualifying buyers, there is $6,000 available to use towards down payment and/or closing costs. This down payment assistance is offered through the South Carolina Housing Authority. Although, buyers must go through a participating lender for this combined first mortgage and DPA solution.
Down payment assistance SC programs really work especially well when combined with an FHA loan. Since FHA loans require a 3.5% down payment, the $6,000 DPA and possibly seller paid closing costs, combine to make an easier way to buy a home in SC. Maybe even combining for no money down. Plus, ask about adding an MCC tax credit which could save up to $2,000 per year in income taxes!
South Carolina FHA Loans
Most of the time, VA and USDA are the best low to no money down home buyer options. Yet, there are times where the popular FHA loan wins out. FHA loans offer flexible underwriting guidelines which help more buyers qualify. Examples include allowing higher debt ratios, non occupying co borrowers, gift funds for down payment, manufactured home financing, buying a condo, purchasing a HUD foreclosure, and more. Also, we highly recommend our very popular articles which explain FHA property flipping rules and FHA gift of equity purchases from family.
South Carolina Conforming Loans
Whether buying a primary residence, investment property, or second home, conforming loans are the most popular loan choice. Plus, conforming loans are not just 20% down options. Today’s conforming loans allow 10% down payment for a vacation home purchase.
Additionally, it is possible to buy a primary residence with just 3% down payment. Both, Fannie Mae’s HomeReady and Freddie Mac’s Home Possible, provide this low down payment, reduced mortgage insurance option. Furthermore, the down payment may be gifted and conforming programs now allow co signors.
Typically, conforming loans are the better option for buyers with higher credit scores. Although, there are other times when they win out over other options. Actually, they must be used for second homes and rental properties.
South Carolina Affordable Living
As shown by these mortgage programs and the Homestead Exemption SC, residents can create a combination which creates a very affordable way to live in SC. Check out which part of SC matches your lifestyle and consider buying a piece of SC today. Maybe even qualify for the Homestead Exemption SC offers.
We encourage you to check out other informative articles on this site to create your affordable living scenario.