South Carolina's property tax structure rewards primary residents and penalizes investment properties — the gap between the two assessment rates is large enough to significantly affect vacation rental investment returns. Understanding exactly how the system works before you buy, or as you plan your current property's finances, prevents unpleasant surprises on your tax bill.
South Carolina's Two-Tier Assessment System
South Carolina assesses residential properties at two different rates depending on ownership and use:
- Primary residence (4% assessment ratio): Applies to the property where you legally reside and claim as your primary home. The 4% ratio means your assessed value for tax purposes is 4% of fair market value.
- Investment / vacation rental / second home (6% assessment ratio): Applies to all other residential properties — including vacation rentals, second homes, and investment properties where the owner does not live. The 6% ratio means 50% higher assessed value than the same property would carry as a primary residence.
The practical impact: a $400,000 vacation rental in Myrtle Beach has an assessed value of $24,000 for tax purposes (6% × $400,000). The same property as a primary residence would have an assessed value of $16,000 (4% × $400,000). Applying the applicable millage rate to the higher assessed value produces a substantially larger tax bill.
Typical Myrtle Beach Tax Bills by Property Value
| Property Value | Investment Rate (6%) | Primary Rate (4%) |
|---|---|---|
| $250,000 | ~$2,000–$3,200/yr | ~$1,300–$2,100/yr |
| $400,000 | ~$3,200–$5,100/yr | ~$2,100–$3,400/yr |
| $600,000 | ~$4,800–$7,700/yr | ~$3,200–$5,100/yr |
| $800,000 | ~$6,400–$10,200/yr | ~$4,300–$6,800/yr |
Ranges reflect varying millage rates across Horry County's different tax districts. Consult the Horry County Assessor for precise figures for specific properties.
The STR and Short-Term Rental Registration
South Carolina requires vacation rental properties to collect and remit a 7% accommodations tax on short-term rental revenue, in addition to the applicable local accommodations tax (typically 1.5% in Myrtle Beach). These taxes are separate from property taxes but must be factored into STR investment return calculations. Non-compliance creates significant penalty exposure.
The Homestead Exemption Does Not Apply to Investment Properties
South Carolina's homestead exemption — which provides tax relief to residents 65 and older or those with certain disabilities — applies only to primary residences assessed at the 4% rate. Investment and vacation rental properties receive no homestead benefit regardless of owner age.
Planning Implication
When modeling returns for a Myrtle Beach vacation rental investment, use the 6% assessment rate without exception. Assuming or hoping for primary residence treatment on a property you will rent creates a budget gap that consistently surprises new investors when the actual tax bill arrives.
Property Maintenance for Myrtle Beach Investors
Bakerss provides professional maintenance for Myrtle Beach vacation rental properties throughout Horry County. Property maintenance plans starting at $150/month.
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