Purchasing a second home in the Myrtle Beach area is an exciting step, but it comes with tax implications that every buyer should understand before closing.
Whether you plan to enjoy the condo yourself or generate rental income, your property tax situation will vary based on how the home is classified and used. Here's a straightforward breakdown of what to know about taxes when buying a condo in Myrtle Beach.
How South Carolina Property Taxes Work for Second Homes
South Carolina assesses property taxes based on the classification of the home. There are two primary categories that affect second-home buyers:
- 4% Owner-Occupied Rate. This applies to your primary residence. If the Myrtle Beach condo is your main home, you qualify for this lower rate and may also be eligible for the homestead exemption.
- 6% Non-Owner-Occupied Rate. This is the standard rate for second homes, vacation properties, and investment condos. The majority of second-home buyers in Myrtle Beach fall under this category.
The difference is significant. At the 6% assessment ratio, your tax bill on a second home can be roughly two to three times higher than what you'd pay if it were your primary residence.
Can You Lower Your Property Tax Rate?
In some cases, yes. If you decide to make the Myrtle Beach property your legal primary residence and meet the state requirements, you can apply to have the assessment changed to 4%. This involves registering your vehicles in South Carolina, updating your voter registration, and making the condo your official domicile. Many retirees who move to the Grand Strand full time take advantage of this.
You cannot, however, receive the 4% rate on a property that you rent out for more than 14 days per year. If you're generating rental income from your Myrtle Beach condo, the property will be assessed at the 6% rate regardless of how much time you personally spend there.
What About Short-Term Rental Taxes?
If you rent your property through platforms like Airbnb or VRBO, South Carolina requires you to collect and remit accommodations tax, which is 7% at the state level plus any local taxes that apply in Horry County. This is separate from your annual property tax and must be handled quarterly or as required by the South Carolina Department of Revenue.
Short-term rental activity also affects how you classify the property on your federal tax return. Depending on your level of personal use versus rental use, you may be able to deduct mortgage interest, property taxes, insurance, and depreciation — but the rules differ based on whether the property is primarily a personal home or a rental property.
How Property Taxes Are Calculated in Horry County
Property taxes are based on the county's assessed value multiplied by the millage rate. For Horry County, the millage rate varies slightly depending on the specific municipality (Myrtle Beach, North Myrtle Beach, unincorporated areas, etc.). As a general estimate:
- Assessed value = Market value × assessment ratio (4% or 6%)
- Tax owed = Assessed value × millage rate
- Example: A $350,000 condo assessed at 6% = $21,000 assessed value × the Horry County millage rate
The Horry County Assessor's website provides current millage rates, and many buyers are surprised at how affordable the total tax bill is compared to northern states — even at the 6% rate.
Federal Tax Considerations for Second Homes
On your federal return, if you use the property personally for more than 14 days or more than 10% of the days it was rented (whichever is greater), it is treated as a personal residence for tax purposes. This limits your ability to deduct rental losses but still allows you to deduct mortgage interest and property taxes. If the property is primarily a rental, you may be able to claim depreciation and offset rental income with operating expenses.
Many buyers of Myrtle Beach condos for sale work with a CPA familiar with vacation rental properties to maximize deductions and stay compliant. This is especially important in the first year of ownership.
Frequently Asked Questions
Do I pay property taxes at closing?
Property taxes in South Carolina are paid in arrears. At closing, you'll typically see a tax proration — the seller pays their share of taxes up to the closing date, and you take responsibility from that point forward. Your first actual tax bill won't arrive until the following year.
Are there any property tax exemptions for seniors in South Carolina?
Yes. The Homestead Exemption exempts the first $50,000 of the fair market value of your legal primary residence if you are 65 or older, permanently disabled, or legally blind. This does not apply to second homes or rental properties.
Will my property taxes change after I buy?
Yes, they can. The property will be reassessed at the time of sale, which may result in a higher (or lower) tax bill than the previous owner was paying. Budget accordingly and confirm with your agent what the expected tax bill will be post-purchase.
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