When you don't pay the real property taxes on your South Carolina home, the tax collector can sell your home in a tax sale to satisfy the lien.
But the winning bidder from the sale can't get ownership of your home right away. You'll get time to catch up on the overdue amounts before this happens. In South Carolina, you'll get a one-year redemption period before the purchaser gets a deed to your property.
You'll most likely lose the property permanently, however, if you don't pay off the tax debt during the redemption period after the sale.
People who own real property have to pay property taxes. The government uses the money that these taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value.
If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly mortgage payment to later pay the property taxes. The servicer pays the taxes on the homeowner's behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly.
When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property act as collateral for the debt.
All states, including South Carolina, have laws that allow the local government to sell a home through a tax sale process (or get title to the property in another way) to collect delinquent taxes.
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.
However, the purchaser might not get the deed to the property immediately. 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 can usually get ownership of the property by foreclosing the lien or taking specific procedures to convert the certificate to a deed.
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.
If you don't get current on the tax debt, the person officially in charge of collecting delinquent taxes, most likely the tax collector or county treasurer, can sell your 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).
But the buyer doesn't get ownership of the home right away. The purchaser receives a receipt following the sale, subject to your right of redemption (see below). (S.C. Code Ann. § 12-51-60).
If no one else bids on the property at the sale, the Forfeited Land Commission will be the winning bidder unless the property is contaminated and the Commission opts not to make a bid. (S.C. Code Ann. § 12-51-55).
South Carolina law requires notice of the sale to be published in a local newspaper once a week for three consecutive weeks. But you won't receive a notice about the sale through the mail. The tax collector will, however, send notice in the mail about the delinquency before the publication of the sale happens. (S.C. Code Ann. § 12-51-40).
Many states allow delinquent taxpayers to pay off the amounts owed and keep the home. This process is called "redeeming" the property.
In many states, the homeowner can redeem the home after a tax sale by paying the buyer from the tax sale the amount paid (or by paying the taxes owed), plus interest, within a limited amount of time. Exactly how long the redemption period lasts varies from state to state, but usually, the homeowner gets at least a year from the sale to redeem the property. In other states, though, the redemption period happens before the sale.
In South Carolina, you get 12 months after a tax sale 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.
However 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 you must 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 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 someone buys a property at a South Carolina tax sale, they 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're facing a property tax sale in South Carolina and have questions (or need help redeeming your property), consider talking to a foreclosure, tax, or real estate lawyer.