Did you know that if you buy a home from a seller who is a non-resident of South Carolina that the seller must hold back 7% of their gain for taxes to the state of South Carolina? The strange thing is that the way the rules are written it appears that the burden falls on the Buyer of such property to make sure these funds are withheld at closing. It sounds crazy, but you can see for yourself below. Below is the link to the 20 page PDF produced the SC Revenue Department regarding SC Revenue Ruling #09-13.
I reached out to a closing attorney who let me know that this is the responsibility of the seller and that the closing attorneys make sure all the appropriate paperwork is completed and the funds are withheld. My hope was that despite the strange way the wording is from the state of South Carolina that the closing attorneys would make sure this is done right. That said, if you are representing a Buyer in South Carolina and they are purchasing a property from an out of state seller, that they best be paying attention to this.
As best I understand this, if it’s an non-resident individual, the tax rate is 7%. If it’s a non-resident corporation then it’s 5%.