In an effort to prevent Beaufort County residents seeking the residential property tax exemption from paying more than a 50% increase in taxes and accruing costly fees, the county, for the second year, will not penalize full-time residents for paying after the Jan. 18 deadline if they have filed their exemption application by then.
A combination of personal retirements, COVID-19 sick leave and an increase in applications have led to a backlog of over 3,000 applications for the lower property tax rate. County spokesperson Chris Ophardt said if the trend continues, the county expects to receive an additional 900 applications before Tuesday’s deadline.
Maria Walls, Beaufort County treasurer, said that in her 11 years with the treasurer’s office, there is usually some kind of backlog, but it’s not usually this bad.
“It can be financially catastrophic to our customers,” she said, “and something has to be done.”
How does the exemption work?
The legal residence exemption offers a significant property tax discount, from 6% to 4% for Beaufort County residents who use their home as their primary residence more than half the year. A tax bill for a $420,000 property showed the taxes owed were close to $3,600 without the exemption, and almost $2,000 with the exemption.
The cost is significantly higher without the exemption, Walls said, because the calculation for a 4% or 6% tax rate is made on the appraised price of the property, then multiplied by the millage rate, which is different for each municipality.
Ophardt said the backlog is partly a result of the assessor’s office losing three members of senior staff. COVID-related sick leave and an increase in Bluffton residents compounded the issue, he said.
Beaufort County received about 9,000 applications in 2019. That number jumped to more than 13,000 in 2020 and 12,513 in 2021. Currently, over 3,000 of those applications are in limbo, compared to 2,450 last year, Walls said.
The penalties accrued over the first two months after the deadline are the highest, reaching 15% of the total initial cost. The penalties usually are imposed if applicants don’t pay their taxes before the Jan. 18 deadline, regardless of whether their legal resident exemption application has been reviewed.
So if a customer’s $10,000 property tax bill isn’t paid on time because they’re waiting for the result of the application, and the assessor’s office cannot process it before March 16, the customer would end up owing $11,500 instead. If their application is approved, they would receive a refund of the 2 percentage point difference at a later date, but no refund for the penalties.
Once the application is approved, the customer can expect a refund for the difference, but the temporarily increased price raises the mortgage during that time, sometimes leaving customers unable to pay.
Without a fee waiver, customers would have to choose between paying the 6% rate and then waiting for the refund of the difference, or not paying until their application is approved and then having to pay the costly penalties.
Customers whose mortgage company has already paid will be prioritized, meaning those whose escrow payments have increased significantly will have their applications processed faster. Customers who have paid the rate themselves will also have higher priority, so they should receive their refunds faster.
Those who have not paid their tax bills will have 30 days after their application is processed to pay the tax.
Why the backlog?
Ophardt said another contributing factor to the backlog is that customers normally wait til November to file for their exemption, although they can file it at any point in the year. The sudden surge of applications has inundated the assessors office.
The processing team, which handles non-complex applications that don’t require a detailed review or have missing documentation, have reviewed over 4,000 applications in less than a month, according to Ophardt.
Although the temporary suspension of penalties is the current fix, the county is looking for a long-term solution to handle backlogs in the future.
Customers who wish to check the status of their application can visit the Assessor’s Office website.