South Carolina Taxes: A Guide for Buyers Relocating to Charleston

Taxes are one of the biggest reasons people move to South Carolina, and the Charleston area is no exception. The state does not tax Social Security, assesses owner-occupied homes at one of the lowest effective property-tax rates in the country, and in 2026 began restructuring its income tax with a stated long-term goal of eliminating it. This page walks through what relocation buyers actually need to know — income tax, retirement income, property tax, sales tax, vehicles, and estate tax. It is general information, not advice, and tax law changes, so verify current figures with the South Carolina Department of Revenue (SCDOR) and your county before relying on them.

South Carolina income tax

South Carolina overhauled its individual income tax in 2026. Beginning with the 2026 tax year, the state uses a two-rate structure: 1.99% on the first $30,000 of taxable income and 5.21% on taxable income above that, replacing the older three-bracket system that topped out at 6%. The state has also set a mechanism to keep reducing the top rate when revenue targets are met, with lawmakers framing it as a path toward eventually phasing the income tax out. The starting point for the SC return is now federal adjusted gross income, with a new South Carolina Income Adjusted Deduction that phases out at higher incomes.

For a buyer comparing states, the practical takeaway is that South Carolina's effective income-tax burden is lower than its old headline rate suggested and is trending down — though high earners with mostly ordinary income may still find a flat-tax state like neighboring North Carolina lower on wages alone.

Social Security and retirement income

South Carolina does not tax Social Security benefits, and it does not tax railroad retirement. For other retirement income, the state allows a deduction of up to $10,000 of qualified retirement income before age 65. At age 65, every resident may deduct up to $15,000 of income from any source (reduced by any retirement-income deduction already claimed). Military retirement pay is fully exempt. South Carolina also excludes 44% of net long-term capital gains from taxable income, which matters for buyers selling investments to fund a move.

Property tax

This is where South Carolina is unusually favorable. The state's average effective property-tax rate is roughly 0.57% of market value — among the lowest in the nation and well below the national average near 1%. The key concept is the assessment ratio:

• 4% legal-residence ratio for an owner-occupied primary home. This is the low rate, and it also removes school-operating taxes from the bill.
• 6% ratio for second homes, vacation properties, and rentals — and these do not get the school-operating exemption. A second home is taxed meaningfully higher than the identical home used as a primary residence.

You must apply for the 4% legal-residence classification with your county assessor; it is not automatic. Owners 65 and older who have been South Carolina residents for a year also qualify for the Homestead Exemption, which exempts the first $50,000 of fair market value, filed with the county auditor. Counties reassess on a five-year cycle, with a 15% cap on the increase in value at reassessment. Millage rates vary by county and municipality, so always confirm the actual bill for a specific address.

Sales tax

South Carolina's statewide sales-and-use tax is 6%. Local jurisdictions add local-option taxes on top, so the combined rate in the City of Charleston is generally around 9%, and rates differ across Charleston, Berkeley, and Dorchester counties — confirm the rate for the specific municipality. Unprepared groceries are exempt from the state sales tax, and prescription medicines are exempt as well. Residents 85 and older receive a small sales-tax reduction.

Vehicle taxes

South Carolina charges an annual personal-property tax on vehicles (assessed at 6%), billed by your county — this is separate from registration and is often a surprise to newcomers. When you first title a vehicle in South Carolina, you pay a one-time Infrastructure Maintenance Fee in place of sales tax, capped at $500. New residents must transfer their license and registration to South Carolina within the state's deadline after establishing residency; check current SCDMV timelines.

Estate and inheritance tax

South Carolina has no estate tax, no inheritance tax, and no gift tax. This is a meaningful draw for buyers relocating from states that do impose them.

Residency and domicile

To capture South Carolina's benefits — the Social Security exemption, the retirement deductions, and especially the 4% property-tax ratio — the home generally needs to be your legal domicile, not a second residence. Snowbirds who keep their legal domicile in another state pay the 6% ratio on their South Carolina property and do not get the residency-based income-tax breaks. Establishing domicile typically involves your driver's license, voter registration, vehicle registration, and where you actually spend your time (the state uses a 183-day standard).

Frequently Asked Questions

Does South Carolina tax Social Security?

No. South Carolina does not tax Social Security benefits at all, regardless of your age or income.

What is the South Carolina income tax rate?

Beginning in 2026, South Carolina taxes the first $30,000 of taxable income at 1.99% and income above that at 5.21%, down from a prior top rate of 6%, with a stated goal of further reductions over time. Confirm the current year's figures with SCDOR.

How much lower is the property tax on a primary home vs. a second home?

A primary residence is assessed at a 4% ratio and is exempt from school-operating taxes; a second home or rental is assessed at 6% with no school-operating exemption. On the same physical house, the second-home bill can be roughly a third higher or more, depending on local millage.

Do retirees pay tax on pensions and IRA withdrawals in South Carolina?

Partially. Before 65 you can deduct up to $10,000 of qualified retirement income; at 65 and older you can deduct up to $15,000 from any source. Amounts above the deduction are taxed at ordinary rates. Military retirement is fully exempt.

What is the sales tax in Charleston?

The state rate is 6%, and with local-option taxes the combined rate in the City of Charleston is generally around 9%. Groceries and prescriptions are exempt from the state sales tax. Verify the exact rate by municipality.

Does South Carolina have an estate or inheritance tax?

No. South Carolina imposes no estate tax, inheritance tax, or gift tax.

I'm a snowbird — can I get the 4% property-tax rate?

Only if South Carolina is your legal domicile. If you keep your primary residence and legal domicile in another state, your Charleston-area home is taxed at the 6% second-home ratio.

Keep Reading

• Relocating to Charleston: The Complete Guide
• Charleston Cost of Living
• Buying a Second Home in Charleston
• Charleston Jobs and Economy

This page is general information and not tax, legal, or financial advice. South Carolina tax rates, deductions, and thresholds change — the income-tax figures here reflect the 2026 restructuring and should be re-verified annually with the South Carolina Department of Revenue and a licensed tax professional.