If you fail to pay your property taxes, the past-due amount becomes a lien on your home. In South Carolina, once a tax lien is on your home, the taxing authority may hold a tax sale, which is a public auction.
At the auction, the collector sells the home to the person or entity that offers the highest bid above the amount sufficient to pay all delinquent taxes, assessments, penalties, and costs. (S.C. Code Ann. § 12-51-50.) But the buyer doesn't get ownership of your home right away.
Instead, the purchaser gets a receipt following the sale, subject to your one-year right of redemption. (S.C. Code Ann. § 12-51-60.)
Each state has a different tax sale process to collect delinquent taxes.
In some places, the taxing authority sells the property if the homeowner doesn't pay off the debt. The purchaser at the sale gets title to the property.
But the purchaser might not get the deed to the property right away. Sometimes, a redemption period must expire before the buyer receives the deed.
In other places, the taxing authority sells the tax lien. The buyer gets a tax lien certificate. The buyer may then try to collect the past-due taxes, plus interest, from the delinquent taxpayer.
If the delinquent taxes aren't paid by a specific date, the lien buyer usually can get ownership of the property by foreclosing the lien or taking specific procedures to convert the certificate to a deed.
In South Carolina, the buyer at the property tax sale doesn't get title to the property immediately. Instead, the purchaser gets a receipt (basically, a tax lien certificate), subject to the homeowner's right of redemption. (S.C. Code Ann. § 12-51-60.)
And sometimes, a tax foreclosure process is used, or the taxing authority simply executes its lien by taking title to the home. State law then typically provides a way for the taxing authority to dispose of the property, usually by selling it.
In South Carolina, the tax collector or county treasurer sells the home at a public auction. At the auction, the winning buyer will be the person or entity that offers the highest bid above the amount sufficient to pay all delinquent taxes, assessments, penalties, and costs. (S.C. Code Ann. § 12-51-50.)
Again, the winning bidder gets a receipt after the sale. The receipt is evidence of the winning bidder's interest in the property during the redemption period.
To avoid a property tax sale in South Carolina, you must pay all delinquent taxes, assessments, penalties, and costs. The county has to receive and process this amount before the sale.
If you don't pay your property taxes in South Carolina and you have a mortgage on your home, your lender might pay the delinquent taxes. The lender pays this expense because if a home goes through the tax sale process, the mortgage will probably be wiped out.
But even if the lender pays the taxes to stop a tax sale, you're not off the hook for them. The lender will add the taxes to what you owe. If you can't reimburse the lender, it might foreclose on your home.
In South Carolina, you get 12 months after a tax sale date to redeem the property. (S.C. Code Ann. § 12-51-90, S.C. Code Ann. § 12-51-130.)
No more than 45 days nor less than 20 days before the end of the redemption period, the tax collector must mail you a notice by certified mail, return receipt requested. This notice lets you know that the end of your redemption period is approaching. (S.C. Code Ann. § 12-51-120.)
To redeem your home, you must pay the tax collector the delinquent taxes, penalties, costs, assessments, and interest due to the bidder up to 12%. (S.C. Code Ann. § 12-51-90.)
The interest you'll have to pay depends on when you redeem the home.
But the interest due can't exceed the bid amount that the Forfeited Land Commission submits, which is the opening bid at the auction. So, the interest can't be more than an amount equal to all delinquent taxes, penalties, assessments, and costs, plus the current year's taxes that are due. (S.C. Code Ann. § 12-51-90, § 12-51-55.)
If your mobile home or manufactured home is sold at a tax sale, you'll also have to pay rent to the winning bidder to redeem it. (S.C. Code Ann. § 12-51-96.)
Contact the county tax collector's office to redeem your home after a South Carolina property tax sale. Ask for the exact amount that you have to pay to prevent the tax sale purchaser from getting title to your home.
The redemption amount is payable to the collector. Once you redeem the property, the bidder who purchased the property at the tax sale is notified and sent a refund.
Property that isn't redeemed is conveyed by a tax sale deed to the successful purchaser. Generally, the conveyance happens within 30 days, or as soon as possible after that, following the expiration of the redemption period.
If you can't redeem the home, you might be able to set aside (invalidate) a tax sale by showing, for example:
But if you fail to redeem within 12 months and after the passing of an additional 12 months, the high bidder gets a tax deed, which is incontestable on procedural or other grounds. (S.C. Code Ann. § 12-51-90, S.C. Code Ann. § 12-51-130.) (In very rare circumstances, you might be able to contest the sale even after this time expires.)
So, if you want to try to set the sale aside, have an attorney review the tax collector's entire file as soon as possible to determine whether the collector strictly complied with every legal requirement. Any instance of the tax collector's noncompliance with South Carolina's tax sale statutes could be grounds for overturning a tax sale.
Even though you'll get a redemption period after a South Carolina tax lien sale, in most cases, it's better to take action before you become delinquent on your taxes to make them more affordable.
You could, for example, find out if you meet the criteria for a property tax exemption, like a homestead exemption. Or you might also be able to apply to the taxing authority to enter into a payment plan, allowing you to pay what you owe in installments over time.
Also, some states and local governments have special programs to help financially struggling or older homeowners who can't keep current on their property taxes. These programs might provide a low-interest loan or grant to pay the taxes.
During the redemption period, the defaulting taxpayer retains ownership and possession of the property. So, if you buy a property at a South Carolina tax sale, you can't take possession of the tax sale property. The purchaser has no ownership rights to the property and no right to enter the premises or contact the owner.
The winning bidder from the tax sale isn't allowed enter, maintain, alter, or otherwise interfere with the property until the redemption period expires, and a deed has been issued. This means the purchaser can't do anything with a property until after getting a tax deed.
But if the defaulting taxpayer doesn't redeem the home during the redemption period, the property is deeded to the successful bidder through a tax sale deed. Ownership rights transfer after the property isn't redeemed, and a tax deed is recorded. However, if the taxpayer redeems, the bidder gets a refund.
If you want more information about South Carolina property tax and redemption laws, consider talking to a tax deed lawyer, like a foreclosure lawyer, tax lawyer, or real estate lawyer with experience with property tax issues.
To learn more about property taxes and other aspects of homeownership in general, get Nolo's Essential Guide to Buying Your First Home by Ilona Bray, J.D., Attorney Ann O'Connell, and Marcia Stewart.