There are two things we can always be assured will exist so long as humanity exists – death and taxes. Over the years, the government has found many creative ways to tax the people. It wasn’t that long ago that taxing people’s income in the US was unconstitutional, and now the income tax is a government staple!
But this post isn’t about trashing the government. This is about a special tax that the government (specifically state governments) loves to slap on people. That tax is known as the “non-resident seller withholding.”
Here’s how it works in SC. If you sell a home in the state of SC but have your primary resident out of stateI (such as in Florida), you will have to pay a 7% tax at the time that you sell your property (5% if the home is possessed by a corporation). That’s as much as you would have to pay if you paid two realtors their full commissions!
No one will ever tell you this when negotiating with you, and guess what will end up surprising you when you get your closing documents? If you sell your home for $100,000, you will likely walk away with a maximum of $93,000. That’s a lot of money to unexpectedly lose just to the Department of Revenue!
So now what? Well, now you know what you’re up against, and you can keep these numbers in mind when negotiating. Upstate House Buyers always covers the property tax on a house we buy, but we aren’t technically allowed to pay your non-resident tax. If you feel burned by this, we will try to work with you. We love working with non-resident sellers, and we want everyone to walk away from the closing table happy that they got a deal that they deserved.