To ensure property owners are paying their property tax at the correct rate, Dorchester County began a legal residence audit on February 2, 2018.

The goal of the program is to recover lost property tax revenue, owed to the County and school districts, by discovering and collecting on improperly claimed exemptions. 

In South Carolina, taxpayers are eligible for a four percent legal residence assessment and an exemption from property taxes levied for school operations, on their primary owner-occupied residence. Occasionally, however, taxpayers claim exemptions on properties that do not qualify, including:

• Vacation Homes
• Multiple Homes
• Rental Properties 
• Other properties in which the owner does not primarily live

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Basis for the Audit

South Carolina Code of Laws Section 12-43-220 (vii)(A) 

If a person signs the certification, obtains the four percent assessment ratio, and is thereafter found not eligible, or thereafter loses eligibility and fails to notify the Assessor within six months, a penalty is imposed equal to one hundred percent of the tax paid at the four percent rate, plus interest on that amount at the rate of one half of one percent a month, but in no case less than thirty dollars nor more than the current year’s taxes. This penalty and any interest are considered ad valorem taxes due on the property for purposes of collection and enforcement.

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How is the Audit Conducted?

The County uses data received via TransUnion research tools to identify violations of the 4% Legal Residence Assessment Ratio.

Data considers various points, including, but not limited to:

• A residence owned in another jurisdiction receiving the exemption
• Trusts with multiple properties receiving the exemption
• Certificates of death
• Changes in marital status
• Location of registered vehicles

Owner Notifications and Penalty

Owners are notified once a violation is confirmed. Upon notification, the owners are required to pay the taxes due at the 6% assessment ratio. The taxes paid, previously, at the 4% assessment ratio are forfeited, plus interest, as the penalty.

Each taxing entity (municipalities, County, school districts etc.) receives their allocation of the taxes at 6% and the County will retain the penalty portion to offset the administrative costs of completing the audit in-house.

The audit considers three tax years; the current and two previous years. If activity is fraudulent (i.e. violation addressed in previous audit), there is no limitation in the law as to how far the County can look back.