Is there a tax break for agricultural property?
Yes, SC Law provides for a substantial tax break on real property that is actually used for a bona-fide agricultural use. If qualified, the property’s taxable value is based on the “Use Value”, which is usually considerably less than the property’s “Market Value”. The “Use Value” is based on the productive capability of the soil type or types in the property. The assessed value is 4% of the “Use Value”, unless a corporation with ten (10) or more stockholders owns the property, then the applicable ratio is 6%.
What must an agricultural real property owner do to get this tax benefit?
The owner must file an Agricultural application with the County Assessor. The filing period is January 1st of the current year through January 16th of the following year. Once the initial application is filed, it will automatically be renewed each year until there is a change in the property use/or a change in title. It is the owner’s responsibility to make sure applications are timely filed. Agricultural real property which is actually used for agricultural purposes shall be taxed on an assessment equal to:
A. Four percent of its fair market value for such agricultural purposes for owners or lessees who are individuals or partnerships and certain corporations which do not:
1. Have more than 10 shareholders.
2. Have as a shareholder a person (other than an estate) who is not an individual.
3. Have a nonresident alien as a shareholder.
4. Have more than one class of stock.
B. Six percent of its fair market value for such agricultural purposes for owners or lessees who are corporations except for certain corporations specified in (A) above. (S.C. Code 12-43-220(d)(1).
Definition of Agricultural Real Property
Agricultural real property shall mean any tract of real property which is used to raise, harvest or store crops, feed, breed, or manage livestock, or to produce plants, trees, fowl, or animals useful to man, including the preparation of the products raised thereon for man’s use and disposed of by marketing or other means. It includes, but is not limited to, such real property used for agricultural, grazing, horticulture, forestry, dairying, and mariculture. In the event at least 50% of real property tract shall qualify as “agricultural real property”, the entire tract shall be so classified, provided no other business for profit is being operated thereon. The term “agricultural real property” shall not include any property used as the residence of the owner or others in that the taxation of such property is specifically provided for in Section 2 (C) and (E) of Act 208.