David owns a home in Lexington County, South Carolina, assessed at the 4% owner-occupied ratio. He is transferred out of state for work and begins renting his South Carolina home to tenants while living in North Carolina. He does not notify the county assessor of this change. Which of the following best describes the legal consequence under South Carolina law?
Correct Answer
A) David is required to notify the county assessor; failure to do so may result in back taxes, penalties, and interest at the 6% rate.
When a property no longer qualifies as an owner's primary residence — such as when it is converted to a rental — the owner is legally obligated to notify the county assessor. Failure to report the change of use can result in the county reassessing the property at 6% retroactively, and the owner may owe back taxes, penalties, and interest for the period during which the incorrect 4% rate was applied. SC law places the affirmative duty to report changes on the property owner.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
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