South Carolina rental property tax and the home-sale exclusion

Illustration only: $240,000 taxable value, 290 total mills, 2025 school operating rate. Rounded annual tax; confirm the actual address and tax year.

A former residence can have a much larger property-tax bill as a rental. In South Carolina, an eligible legal residence generally has a 4 percent assessment ratio and a school operating-tax exemption. A typical rental is assessed at 6 percent and does not receive that exemption.

Using a hypothetical 290-mill district and the 2025 school operating rate, our $240,000 example rises from about $1,430 to $4,180 a year. These are historical planning figures. Confirm the property's taxable value, district, eligibility and conversion-year treatment with the county before relying on a budget.

Related: Greenville County millage rates and the rental tax formula

The second question concerns the federal home-sale exclusion. Generally, qualifying owners can exclude up to $250,000 of gain, or up to $500,000 for a qualifying married couple filing jointly. Ownership and use tests normally require two years within the five years ending on the sale date; other conditions also apply.

After you move out, time spent living in the house gradually falls outside that five-year window. It is not the first tenant's move-in date that controls. Someone who already meets the tests may have roughly three years after moving out, but exact dates, exceptions and the ownership history matter. Ask your tax adviser to calculate the deadline before you sign a lease.

Gain attributable to rental depreciation generally cannot be excluded. Rental periods and other facts can also affect the tax result. Have the adviser compare a sale now with a sale later, using your basis and expected selling costs. Put the relevant date on the calendar.