The Great Recession had unexpected effects on South Carolinian property tax rates. When the housing market was at its height during the early and mid 2000’s citizens were begging for relief from the high property reassessment values they were getting. So in 2006 the state responded with Act 388 in 2006, which exempted owner-occupied properties from taxes to fund school operations, raised the sales tax to make up the revenue, and put a 15 percent cap on the amount a property’s taxable value could rise during reassessment. The cap was meant to approximate the rate of expected inflation. Counties reassess every five years, so the 15 percent cap represented 3 percent annual gains in real estate values.

First, property tax rates increased substantially. Normally, when counties reassess, property tax rates go down to account for rising values. But if values drop, tax rates must rise to generate the same amount of taxes.

Second, more than nine out of 10 properties in Beaufort County had capped values going into the reassessment. While most properties were worth less in 2012 than in 2007, the capped property values were often even lower because those caps were on real estate values dating back to the county’s 2002 reassessment.

Read the full story at http://www.postandcourier.com/article/20140601/PC16/140609958/1006/property-tax-reformers-never-expected-falling-values