Identical homes, different tax bills: South Carolina homeowners blame ‘unfair’ state law

INDIAN LAND, S.C. (WBTV) – Two homes in a Lancaster County subdivision sit side by side.

Built in 2008, the 3,987 sq. feet floor plans with two-door garages are virtually identical. Click back and forth between the property listings on Lancaster County’s online property records, and almost no text changes.

No text, that is, except the tax bills: Ed Dockweiler on Cressingham Drive owes the county $3,560 in property taxes for 2023.

His neighbor next door in the identical home? $2,319.

“I don’t think it’s fair,” Dockweiler said, standing outside the home this fall that he bought in late 2021. “I don’t want to see my neighbor’s taxes increase. What I do want to see is a more level playing field.”

Just up the road in the same subdivision, realtor Brian McCarron has a slightly larger home than Dockweiler and a tax bill a thousand dollars cheaper.

When another new neighbor in the subdivision approached McCarron to ask why he’d been hit with a property tax bill far higher than he’d been told to expect when buying his new home, McCarron went digging.

A South Carolina law implemented in 2006, as McCarron found out, caps how much the taxable value of a home can increase over a five-year period to just 15% — unless the home is sold.

In other words, a home’s taxable worth of $300,000 in 2018 can at maximum only have a taxable value of $345,000 when reassessed in 2023 – until someone like Dockweiler comes along in 2021 and purchases the home for $550,000 at the current market rate.

That’s exactly what happened to Dockweiler and dozens of other new homeowners, who responded in frustration when McCarron put out a call on social media asking who was noticing unexpected tax increases after purchasing a home in 2021 or since.

South Carolina’s law protects longtime homeowners in South Carolina from massive swings in the housing market, such as the country has seen since mid-2021. Anyone who bought before the pandemic in the subdivision is paying taxes on an amount that’s close to the one they paid when closing on the home.

Newcomers, however, pay a price. Dockweiler’s home was worth $300,000 when it was built in 2008, but anyone who’s been paying attention to housing costs in the Charlotte metro area – or anywhere else in the country – in the last couple of years won’t be surprised by the 83% increase in value when he bought it in 2021.

“When you look at a house that’s all the sudden contributing a thousand dollars more to the county’s budget? That seems excessive and not really fair to somebody who’s two doors down and still contributing essentially the same amount of money,” McCarron explained. “I understand cost goes up every year, but there’s got to be a way we can balance that.”

When asked about the situation, Lancaster County administrator Dennis Marshall pointed to the state-mandated five-year reassessment schedule that the county adheres to, saying it “evens out” the differences (It’s the reassessment, however, that state law caps at 15% and hasn’t kept up with rapidly rising market values.).

“Those differences get evened out through the state-mandated reassessment process the County must undertake every five years,” Marshall wrote in an email. “Every County in South Carolina experiences these differences in residential tax values, but Lancaster, like the other 45 counties, undertakes the mandated reassessment process to address the temporary disparity in assessed home values.”

A guide from Charleston County in South Carolina makes it explicit, however: “At reassessment, the taxable value can increase no more than 15% over the previous taxable value.”

Laws capping home value increases until sale aren’t uncommon. More than a dozen states have some kind of cap on assessment increases, according to the finance and business media outlet Kiplinger.

North Carolina is not one of those states, something that Charlotte-area realtor April Villines says contributes to a whole different set of issues where longtime homeowners are more subject to the whims of the market.

“Each county can actually come in and assess at any time, so if they feel the need to do an assessment, they’re going to go ahead and do that,” Villines explained. “It has caused some disruption during the market recently because of the heavy increase in property values.”

Mecklenburg County, which re-assesses every four years, partially offset that impact in the last assessment by lowering their tax rates instead, Villines noted. Still, the market impact on homeowners in North Carolina can be severe.

“I think that’s really the question we need to be asking; does the 26% in market value increase, does that really need to reflect tax increases? So I think we need to almost reconsider our adjustment.”

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