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York rate more favorable to in-state landlords

Karla Knotts, co-owner of Knotts Builders, often trumpets the benefits of owning a home in Clover, S.C., and driving to work in Charlotte.

She reasons: Who wants to pay those high North Carolina property taxes when they can save as much as $45 a month by living in the Palmetto State?

But she doesn’t have such an easy case to make for landlords looking to buy rental property south of the border.

“The tax rate comes up with homebuyers and with renters,” Knotts said. “Renters ask because they see they have to pay a little more and this is because their landlord is paying the higher property taxes and passing the costs on to them.”

How much higher depends on location, but York County calculates the taxes for nonowner-occupied properties with a different formula for out-of-state vs. in-state property owners. According to the York County tax assessor, an in-state owner pays taxes equal to 0.22
multiplied by 4 percent of the property value in the city of Clover.
An out-of-state landlord will pay 0.22 multiplied by 6 percent of
the property value on that same building.

For a $160,000 property that means a South Carolina owner will pay $1,408 a year, while a North Carolina-based owner will pay a property tax bill of $2,112 a year.

“I think part of this plan to ding those investors from out of town is because they can’t vote in South Carolina,” Knotts said. “But the city of Charlotte does this as well to a certain extent. There are transfer taxes on properties for people moving (to Charlotte), and I think it is because they don’t vote in Charlotte yet.”

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