If you're looking to buy or sell a property in South Carolina, then there is a chance that you might need to pay real estate transfer taxes. Although this varies on a state-by-state basis, in South Carolina it is usually the seller that must pay the tax. Read our in-depth guide to find out more.
If you're in the process of buying or selling a property in South Carolina, did you know that you might be liable to pay transfer taxes? Sometimes referred to as "Deed Stamps" or "Deed Recording Fees" in South Carolina, these are taxes linked to an ownership transfer from the seller to the buyer.
While in some states, or even regions, buyers are responsible for paying, in others, it's the seller.
To help you along the way, we've created an in-depth guide to real estate transfer taxes in South Carolina.
Who Pays Transfer Taxes in South Carolina: the Buyer or the Seller?
In the state of South Carolina, a deed recording fee is required when a property changes ownership. This is charged by the state for entering the transfer ownership change into public records.
It is customary for the seller of the property to pay all real estate transfer taxes in South Carolina. The transfer taxes are usually due at the time of closing, alongside other fees such as appraisal fees or agent fees.
If you are selling a property in South Carolina — don't despair, as the rules are not set-in-stone. In other words, by using an experienced real estate agent based in the South Carolina area, they might be able to negotiate with the buyer to split the fees 50/50.
How Much Are Transfer Taxes in South Carolina?
As noted by the South Carolina Department of Revenue, deed recording fees are imposed on a county-by-county basis. Although real estate transfer taxes are collected by your respective county, the rates remain constant throughout the state.
The fees amount to $1.85 per $500, based on the amount that the property sold for. For example, if the property sold for $200,000, then $740 in real estate transfer taxes would be due.
$200,000 (property value) / 500 (increments) = 400.
400*$1.85 = $740
The fees are to be paid to the clerk of court for your South Carolina county on the 20th of the month following the date that the deed recording was made. You can settle your transfer taxes via the official South Carolina Department of Revenue website.
If you're wondering where these fees actually go, they're split between the state and the county. For every $1.85 that is collected in real estate transfer taxes, $1.30 goes to the state, while the remaining $0.55 goes to the respective council.
There is no official guidance on what the funds are spent on, as they do not to a specific state or county budget. However, in most cases, U.S. real estate transfer taxes are used to fund local services.
Can You Deduct Transfer Taxes?
Unfortunately, you are unable to deduct real estate transfer taxes from your federal tax bill. However, you do have the option of including these costs into the overall cost of selling your home, as per any liable capital gains tax that you might face.
If you're looking to buy a house in South Carolina and you agree to pay some of the applicable real estate transfer taxes, then you can include this into the cost basis of the purchase. Although you won't see any tax benefits until you sell your house, you can offset these against capital gains, when you eventually do.
Other Considerations
Real estate transfer taxes can be a confusing part of the home buying and selling process, not least because it is often unclear who actually needs to pay them. Although you will likely need to pay them if you are the one selling the property, an experienced real estate agent might be able to get the buyer to split the costs 50/50.
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