Are the Lowest Property Taxes Always the Best for Homeowners?
Will recent changes to property tax law in neighboring South Carolina knock Union County, North Carolina off its low-tax-reputation perch? Union County, North Carolina has been one of the fastest growing counties in the country over the last five years. Much of Union County's appeal lies in its proximity to Charlotte, a tremendous job generator; Union's well-regarded schools; and a reputation for low property taxes relative to its neighbors. A recent reassessment of property values in the county will increase annual property taxes for nearly every Union property owner although the new taxes are still low compared to what property owners in some other parts of the country pay.
How do property taxes in nearby Lancaster County and York County, South Carolina compare? A 2006 state law enacted in South Carolina shifted the burden of funding school operations from owner-occupied real estate to a statewide 1-cent sales tax. This dropped the property tax for homeowners approximately 40% to 50%. School systems across South Carolina complained that relying on the sales tax would leave them without enough funds and would be a risky source of funding should the economy sour. Now the local governments and school districts have completed their 2008 budget process and have set property tax rates for 2008. The results: some school districts have a budget shortfall. The Fort Mill district has raised fees for athletics and cut teacher positions because of its shortfall. Taxes have been raised for businesses to try to close the funding gap.
Residents who do not have children in the schools may not see the school funding issues as a problem. In fact, retirees have been flocking to Indian Land and the Fort Mill area. But schools are not the only victims of low property taxes. The Fort Mill Times reported last week that Lancaster County has not accepted any new roads into their maintenance system since 1998. The Lancaster County Council recently turned down developer requests to add roads in two new neighborhoods into the maintenance program. What this means is that the homeowners associations of these neighborhoods will need to pay for private road maintenance, a potentially costly alternative for individual homeowners.
If you are considering a move to a new area, remember that the lowest property taxes may not be in your best interest and investigate very carefully how local services are funded.