Is South Carolina a tax lien or tax deed state?

South Carolina: A Tax Deed State

South Carolina is a tax deed state, meaning that tax sales are conducted as tax deed sales. In a tax deed sale, the buyer purchases an interest in the property itself, rather than a lien on the property. This is in contrast to tax lien states, where the buyer purchases a lien on the property and must foreclose on the lien to obtain ownership of the property.

Potential Returns on Investment

Investors who participate in tax sales in South Carolina can expect to receive returns in the form of interest or even receive the deed outright on the property. The return on investment can range from 3% to 12%.

Considerations for Tax Sale Investors

There are several considerations that tax sale investors should be aware of:

• Federal Tax LiensIt’s important to consider federal tax liens when investing in tax sales. If a federal tax lien is filed in the county real estate records and the federal government is not given notice of the tax sale, the sale could still be subject to the federal tax lien. This means that the federal tax lien would continue even after the property is sold.
• HOA Dues and ObligationsTax sale purchasers in South Carolina should review the homeowner association (HOA) dues and obligations associated with the property. Generally, tax sale purchasers are liable for all HOA assessments incurred after the tax deed is recorded, unless the provisions are indefinite or contravene public policy.
• Superfund LiensSuperfund liens are a consideration for tax sale investors. The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) establishes the Superfund program, which funds the cleanup of sites contaminated with hazardous substances. Potentially responsible parties, including current owners, may be held liable for the Superfund lien, regardless of fault. Buyers should assess the level of contamination and potential costs of recovery during the due diligence process.

By being aware of these considerations, tax sale investors can make informed decisions about whether to invest in tax sales in South Carolina.

Sources

• Tax Sale | Delinquent Tax Division
• Collection & Compliance – Liens
• Three Common Pitfalls in Tax Sale Purchases

FAQs

1. Is South Carolina a tax lien or tax deed state?
South Carolina is a tax deed state, meaning that tax sales are conducted as tax deed sales. In a tax deed sale, the buyer purchases an interest in the property itself, rather than a lien on the property.

2. What is the potential return on investment for tax sales in South Carolina?
Investors can expect to receive returns in the form of interest or even receive the deed outright on the property. The return on investment can range from 3% to 12%.

3. What are some considerations for tax sale investors in South Carolina?
Tax sale investors should be aware of federal tax liens, HOA dues and obligations, and Superfund liens.

4. How can I find out more about tax sales in South Carolina?
You can contact the South Carolina Department of Revenue or your local county tax assessor’s office.

5. What are the steps involved in participating in a tax sale in South Carolina?
The steps involved in participating in a tax sale in South Carolina vary depending on the county in which the sale is being held. However, the general steps are as follows:

• Register to bid with the county tax assessor’s office.
• Attend the tax sale and bid on the properties you are interested in.
• Pay the winning bid amount to the county tax assessor’s office.
• Receive a tax deed for the property.

6. What are the benefits of participating in a tax sale in South Carolina?
Tax sales can be a good way to invest in real estate at a discount. Tax sale investors can also earn interest on their investment or even receive the deed outright on the property.

7. What are the risks of participating in a tax sale in South Carolina?
Tax sales can be a risky investment. There is no guarantee that you will be able to sell the property for a profit. You may also be responsible for paying back taxes and other liens on the property.

8. How can I minimize the risks of participating in a tax sale in South Carolina?
You can minimize the risks of participating in a tax sale in South Carolina by doing your research and due diligence. This includes researching the property, the tax sale process, and the potential risks and rewards involved.