Property Taxes & Government Overreach

Property Taxes & Government Overreach

Episode Transcript

Speaker 1 (00:03):
Hey, I'm Michael Blaize. I hope you're enjoying your weekend.
Thanks for tuning into Your Home three sixty today. Your
Home three sixty is the show where we talk about
everything that has to do with your home. I'm a realtor,
so we talk about real estate, we talk about home maintenance,
we talk about even recipes, drinks. We even have little
parties on the patio where I have my musician friends

(00:25):
stop by sometimes. So thanks for tuning into the show.
I normally start the show with the question from a listener,
but I wanted to kind of tell this story and
give this warning again because you assume a lot of
times that that people know what's going on, and sometimes
they don't. So let's talk about taxes. In the state
of South Carolina property taxes. So property, real estate is

(00:48):
taxed at six percent across the board in South Carolina.
Now that's not a flat out six percent. The way
that it works is, you know, the assessor comes out,
they assess your property, they put a value on your property,
and then you multiply that by six percent, and then
you multiply that number by your millages and that's how
much you owe. So it's six percent across the board

(01:12):
in South Carolina, but if you live in your home,
you can qualify for a four percent rate. Now, to
qualify for the special four percent property tax assessment ratio,
the owner of the property must have actually owned and
occupied the residents as is legal residence, and been occupying
that address for some period during the applicable tax year.

(01:34):
Only an owner occupant is eligible to apply for the
four percent special assessments. So you have to have lived
in the home sometime in the last year, and you
have to literally apply for the four percent tax rate. Now,
common sense would have it that if you go from
four percent to six percent, you would be paying fifty
percent higher. Right, So if your property tax bill was

(01:58):
one thousand dollars at the four percent rate, it would
be fifteen hundred bucks at the six percent rate, right.
But that's not how it works for several different reasons.
The numbers are aggregated differently. You have different education credits,
things like that. You end up paying almost three times
as much property tax at the six percent rate than
you do at the four percent rate. So if you

(02:21):
haven't taken that four percent, if you haven't gone and
applied for that special four percent assessment rate. You are
losing out on a whole bunch of money because your
taxes could be a third, almost just a third of
what you're paying if you're paying that six percent rate
right now, but you qualify for the four percent. Let

(02:41):
me tell you how the government works. And this just
rubbed me the wrong way. So I've been living in
my house for twenty three years. I bought it before
we were married, so it's been in my name that
whole time, and we've been married almost that long anyway,
and finally, like you know what, I'm getting older, it
smart to go put my wife's name on the deed

(03:03):
to this property. So that's what we did last year.
And mind you, this was last year. So I get
a notice from Charleston County saying there was a deed
change on your house. So you've lost your four percent
special assessment rate, your property tax assessment ratio at four percent,
it's now six percent. So your property taxes are going

(03:25):
from somewhere around twelve hundred bucks to somewhere around thirty
six hundred dollars. And in mind you, I didn't take
my name off the deed. The house wasn't sold, there
was no transaction or anything. I simply added my wife's
name to the deed. So this triggered for me to
lose this four percent property tax ratio and go to
six percent. The notice goes on to say, we sent

(03:48):
you a notice back in May that you didn't respond to,
which is untrue. You know, I pay attention. If it's
coming from Charleston County, I'm going to open that envelope
right And I know for a fact that I never
received that notice back in May. So I get this
notice last week. So it says, if you want to
reapply for the four percent property tax assessment ratio, you

(04:13):
have to supply us with copies This is for both
me and my wife. Copies of your driver's licenses, your
voter registration ID cards, your car registrations, and get this
your income tax returns. And I'm like, what this goes

(04:33):
back to where I say it all the time. The
government has too much power. They're tyrannical, it's overreaching. It's
your property. I know I'm not the only one that
goes through this, right, it's your property. Think about it,
and they're demanding payment for you to own your own property,
and then they score around with you with stuff like this.

(04:55):
So I gather up all the taxes and I redact
to the Social Security numbers every day the taxes, make
copies of the voter ID cards and the car registrations
and the driver's licenses and the redacted taxes, and I
head down to the assessor's office, figuring that it might
go faster that way. You know, I don't want it
to go out at six percent. I refinance the house

(05:17):
and has a mortgage on it again now, And in
the way escrows work, if they get that tax bill
and pay it, you know, it's three times as months
as it should be, which means the escrow is going
to be short by a couple hundred dollars a month.
And when that happens, the bank usually pays it and
then you pay them back over a twelve month period.

(05:38):
But get this, they also have to raise the amount
that they're collecting from you so that it doesn't happen again.
So if you're short two hundred bucks a month, your
mortgage is going to go up like four hundred bucks
a month to make sure that your escrow's not short
next time around. So that's what little, this little hiccup
from the County government could actually make my more payment

(06:00):
go up four hundred dollars a month over the next year.
Now you get that money back at the end of
the day. But four hundred bucks a month is nothing
to sneeze at. So anyway it you know, I had,
so I had to bite my tongue and go in
there and be nice and and give them the because
you know, the people at work in there, it's not

(06:20):
their fault that there's these onerous regulations. And so I
went and filed the paperwork and they're like, oh, yeah,
it's going to be like eight weeks and oh you
did ah, you did an extension. How come you don't
have your taxes. I'm like, they're still working on them. Okay,
well you know then there this is going to give
you a provisional four percent that only lasts for one year,

(06:43):
and you're gonna have to do this again. Come down,
show us your new taxes before next year's tax bill
goes out. And I'm like, you know, what business is
it of Charleston County to see my income tax returns
and my driver's license in my voter ID? You know
what in't you know, my driver's license and maybe a
piece of mail, utility bill or whatever suffice to prove

(07:06):
that I live there instead of this whole long list
of items. And I'm like, and I was even confused
when I first was looking at the list. I'm like, really,
So I call them up and I'm like, surely it's
just you just have to show like one or two
of these items. They're like, nope, every single one of them.
So that's your government at work for you. So I
figured I would take this opportunity to complain about taxes

(07:30):
and complain about you know what's South Carolina. I didn't
look into it any further. The assessor told me that
it's South Carolina state law now that demands that you
have to provide all those documents, because you know, I
told them what business are is my taxes of yours,
and they're like, well, that's not our decision, sir. You
know that's state law. So you know, I'm going to

(07:53):
be calling my state representative over this, and maybe you
want to too, if you're getting fed up with paying
all this money of them, you know, and I'll take
this to get out of my soapbox. Look at the
roads around here, the schools, all the everything that they're
doing around here. And do you think you're getting your
money's worth for all the tax that you pay? I know,
we get supposedly a property tax break, but in order

(08:16):
to pay us a higher sales tax, including on groceries, right,
they raise the gasoline tax. There's taxes on everything, And
so what are we getting for that? You think you're
getting your money's worth? I don't. And the bigger point
is I want the government to get the hell out
of my life. Right, So that's I guess my point
for today is government get out of my life, and

(08:38):
everybody else is too. And in the second point that
I wanted to distress, which was the original point, you know,
make sure that you file for that four percent property
tax assessment ratio, and make sure you check your tax bill.
If you own your house and you've lived in it
for any amount of time in the last year, make
sure when that tax bill comes out that you check

(08:59):
it and make sure that you're getting that four percent
rate and not the six percent rate. So make sure
you file for that. Even though you got to give
them all these documents, it's well worth it to not
have to pay three times as much as you would
have to otherwise. And by the way, everything that I
just said I was afraid of happening happened. They didn't

(09:20):
change the tax bill in time. It went to the bank.
The bank through escrow paid the taxes at six percent.
My escrow was short. I got the notice that my
payment was going up four hundred and something dollars a month.
And now I have that to deal with. And I've
had some people say to me, you know what, they
want your income taxes so they can so you can

(09:43):
prove that you're not running out, you know, anything in
a room, or you're running out the house or whatever.
Like I said, before, you know what, if I can
show you a driver's license and an ID that I
live there, and I can show you that my bills
go to that property, why do I need to show
you my income tax return to prove Isn't it in

(10:06):
this country innocent until proven guilty. Why do I have
to prove myself innocent by giving you my tax returns
before you'll give me my tax break. The government just
drives me. Not so whether it's local government or federal government.
What a bureaucracy. And look at how and I know,
you know what, I'm upset just like everybody else is

(10:27):
when they have to deal with these tax issues, when
they have to deal with the government. But just think
of how you're treated as a taxpayer and the value
that you're getting for all of this money that you
give to them. Do you think you're getting full value
for your money? Do you think it's worth it? Look
at the roads, look at the schools, and even basic services.

(10:50):
And I've brought this up before. It's so ridiculous that
it's not only Charleston County, Buford County. I own this
property and it's vacant. I have a know, a travel
trailer on it, and I have electricity and water that
I pay for, paid to install, and paid the fees
to install in all of those things. But you know,

(11:11):
it's undeveloped land according to the government because there's not
a house on it according to the county government. So
I have to pay the six percent tax rate. And
I can't even use the waste convenience center. They won't
let me take my trash, my household waste from when
we camp in the trailer to the so called convenience center. Nope,

(11:33):
you need a sticker. They won't let you in without
a sticker and they'll only give you a sticker if
you have a house. So I went through that where
I'm like, I try to take my trash to the
dump and they're like, where's your sticker? And I'm like,
what sticker? Will you need sticker to come in here?
How do I get a sticker? Will you go online
and get one? So I was sitting right there in
the car and I go on my phone and I'm like,

(11:54):
I punch into the system and it says, we can't
find your address. So it was on the weekend. So
Monday morning, my wife calls and they're like, no, you
can't get a sticker unless you have a house. She's like,
but we pay taxes and we have kitchen waste and
all of this, and we have trash to throw away,
and we pay you a lot of money in taxes

(12:15):
and we can't come throw it in the dump. No. Sorry,
My wife says, well, what were we supposed to do
with the trash? They said, you have to take it
home with you. I'm not making this up. You have
to take it home with you. So if I sound
a little animated and upset over these issues, like I

(12:36):
can't get this time back, dealing with these bureaucratic bureaucrats.
I'll stop short, I'll stop with the insult. You know,
I'll stop myself before I get insulting. But yeah, I'll
never get this time back, dealing with these bureaucrats. And
just think, how and I know there's a lot of

(12:56):
people in the world with way more problems than that,
but how ridiculous at the end of the day, in
pretty outrageous if you ask me, And I suppose I
would guess that this was a motivator in this last election,
right and why it turned out the way it did.
I mean not just for these issues alone, I mean

(13:17):
because this is just across the board and out of
control government that thinks that we serve them instead of
the other way around. That we're here to serve the government,
and we're here to serve the bureaucracy, and we're here
to feed the bureaucracy. Whatever the bureaucracy needs, whether it's

(13:38):
paperwork or whether it's money, We're here to serve that
and provide that paperwork and provide that money. And never
mind how onerous it might be, never mind how inconvenient
it might be, never mind the expense involved in all
of this. Never mind that your property rights are negated

(13:59):
in a lot of cases, you know, when it comes
to what I'm talking about here, never mind all of
those things. We're the government after all, and you're here
to serve us, and don't question us. You better not
question us. How about when you get them on the
phone and they're like, sir, sir, or that's what they
do to me anyway. And believe me, I'm nice to them,

(14:21):
and I call and I try to be professional, and
you know, a couple of times I've had to put
my foot down and say you're not going to talk
to me like that, and you better stop right now.
And you know, in some cases that makes it even worse.
But you're dealing with these faceless bureaucrats, you know, if
you're on the phone, or even if you go in

(14:41):
the office. You know, look how you got to stand
in line forever and then in good luck getting accomplished
what you went in there to get accomplished. You know,
I'd say, at least half the time, there's going to
be something that the bureaucracy requires that you don't have
with you. And to me, it's just out of control.

(15:05):
And this is not what America was built on. And
you can say, well, isn't that getting pretty? Isn't that exaggerated?
Michael Blaze? Now you're indicting America over this, Yes, because
you know why. Because what makes America different and what
America was built on was property rights and the right

(15:28):
to own land. And I won't say they've taken that away,
but they sure have lessened it, haven't they. Because now
you can only own land if you're willing to do
what the government tells you you can do with that land.
And you have all of this zoning, and you have
all of these rules, and you have all of this bureaucracy,

(15:51):
and you have all of these taxes, and if you
don't pay the taxes, they'll take the land away from you.
If you don't follow the rules with the zoning, they'll
make you tear down your improvement and lose your money,
and they'll find you and you have to give them
even more money. So to me, that is an indictment
on America, on the current state of government in America,

(16:14):
not on America itself, not on the idea of America,
or on its citizens. It's the best country in the world,
of course, but that's What upsets me so much, and
so many others too, is that this is what it's become.
We've let the bureaucrats take over, and America shines less

(16:35):
brightly because of it. I get a message from Mark
and he has a question. He says, Hey, Blaze, I'm
building a new home and I'm wondering if I should
have my home inspected. Well, that's a great question, Mark,
and a lot of people skip that, and I think
that's a mistake. So of course she'll be required to
have certain aspects of the home inspected during construction, things

(16:58):
like the structure, electric plumbing, and so on. That will
be required by the governing body in your area. So
I don't know what area that you're in that you're
asking this question about, but it's probably the county, and
they'll send the inspector out at certain points of construction
and make sure that the building's up to code. But
you should not rely upon these inspections alone, because all

(17:21):
they're doing is it's not to protect you, per se.
I mean kind of it is. Of course, that's what
the codes are for, but it's simply to make sure
that the process is within code. It's not to check
quality or if they're doing what they agreed to do
for you, or the quality of that work. It's simply
to make sure that it's in code. So you should

(17:43):
not rely upon the building inspector alone. The list of
potential problems with new construction is pretty big. It's huge,
as a matter of fact, according to third party home
inspectors and consumers. We're not going to list all the
problems here, but the most common problems found in new
home construction foundation and structure problems, improper lot drainage issues

(18:05):
that has to do with grading, backfill, etc. Where's the
water going? Window installation problems, so proper installation, water leaks,
I can't tell you how many. Mostly with apartment buildings
and condo units. I see window problems all the time,
and lawsuits are rising out of it, out of improper
window installation, and then that allows water penetration, and then

(18:28):
you get wood rot, you get mold, you get all
kinds of problems, and you're down the rabbit hole with that.
Exterior and interior door problems, are they hung plumb? Are
there big gaps on the exterior doors around the weather
stripping allowing the weatherin? Problems with heating and cooling systems
including proper sized tonnage, proper size amount, ceiling and placement

(18:50):
of ductwork, problems with the electrical systems and components, problems
with the plumbing system and fixtures. This is just a
partial list. These are the most common problems that third
party inspectors and consumers complained about on new construction, but
it's certainly not an entire list. There's plenty of issues
that can go wrong with new construction. So yes, Mark,

(19:12):
I think that you should get an independent inspection on
new construction. I also suggest that you personally take an
active role in inspecting and documenting the entire process. Take
ownership of it. If you see something that doesn't look
right along the way, discuss it with your builder. Pay
close attention to each phase of construction, and document the

(19:34):
process with pictures. This will help to prove your case
if anything goes wrong, and it's also a great selling
tool when you decide to sell the property sometime in
the future. It'll give the buyer confidence that close attention
to detail was paid while it was being built, and
it speaks volumes to the quality of construction. So I'll
tell you a little story about that. I had a

(19:55):
client who was in the market for a house. I
found him a house that was one year old. He
really liked it. We met the owner. The owner had
documented the whole construction process. I mean she had a
binder that was like thicker than a phone book if
you remember what a phone book is. But anyway, she
had this, she had pictures, she had documentation. She even

(20:15):
had where you know, behind this wall or these wires,
behind this wall is the plumbing for this and that.
And we were really impressed, and I'm like, this is great,
and for sure this house is going to be quality,
right because she was just so particular about details. And
so it came to the inspection, and I went to

(20:35):
the inspection as I always do, or do most of
the time if I'm able, and the inspector says, hey,
come under here with me. So we crawl into the
house and he says, look at this. So the beam
goes from one end of the house to the other,
the center beam, and it misses the last two piers
that is supposed to be sitting on. When they started it,

(20:57):
they put it on crooked and it was hanging in
thin air, and it was probably a foot foot and
a half away from the piers, the last two piers
on the other side of the house, so nothing was
supporting the house in that area. It was just kind
of cannilevered. And luckily no damage had occurred yet, and
I couldn't believe it, and so anyway I had to

(21:20):
contact the builder and then threaten them, and anyway, we
got it fixed and everything was okay. But it just
points out here was a year old house. This lady
documented every step of construction and rode these guys, but
obviously she missed that. So even when you monitor progress
and document it with pictures, unless you're a building professional,

(21:42):
and unless you can be there, you know, the whole
time that they're there, watching every single thing they do,
some things can still go unnoticed. And I'll tell you
another story that this was not too long ago. It
was brand new construction and the people moved in in
one of the rooms, so the baby's room was getting
very cold. This was last winter, and they just couldn't

(22:05):
figure it out. They had the HVAC guys out and
they're like, there's nothing wrong with the hvac because sometimes
you know, they'll fail to connect some duct work or
you know, seal it off properly, and it's leaking into
the attic or into the space around it, and that
wasn't the case. So why is this room so cold?
They did a little bit of a destructive investigating and

(22:28):
found that this room was over the garage and they
had not insulated it, so it was literally open to
the cold garage, and so the HVAC couldn't keep up
because there was no insulation there. So it just points
out the problems that you can encounter with new constructions.
So I would suggest that you invest in a three
phase inspection. So if you really want to cover your

(22:52):
bases here, in a three phase inspection, you hire a
third party to inspect the construction at three different phases,
so you get a foundation inspection. This is how they
usually work, and some companies might do it differently, but
this is my understanding a foundation inspection. You're going to
get a foundation inspection in this three phase inspection, so
the first one inspects the foundation. This should be done

(23:14):
on crawl space homes before backfilling the foundation walls and
before framing begins, and on slab homes before the concrete
slab is poured, because of course you need a proper
foundation if you're going to have a quality constructed home,
it all begins with foundation, right, and then you have
a framing inspection. Now, this should be done before interior

(23:36):
walls and insulation are installed, so you can still see
everything now. In addition to inspecting the framing, the electrical,
plumbing and HVAC systems should also be inspected at this point.
And then you have a final walk through inspection. This
is where everything visible gets inspected. It's also where you're
going to get your punch list to provide to the

(23:57):
builder to go back and fix three phases, a foundation inspection,
a framing inspection, and a final walk through inspection. So yes, Mark,
I do suggest that you get an inspection on your
new construction, and I suggest that you get a three
phase inspection. I know you're probably that's much more than
you were probably expecting. As an answer, you're probably like

(24:19):
a yes or no looking for that, but I want
to take that opportunity to explain it. And it is
important just as important as a used house, sometimes maybe
even more important to inspect new construction. And if you're
building a custom home, an architect can be very helpful.
Of course, they'll help with the most efficient layout of

(24:40):
the home, the best materials and systems to use, and
many other things, of course, but you can also have
them inspect the home at certain stages of construction. So
of course, check with the architect directly for their list
of services. But that would be a great service to
have too, if it's a custom home, to have your
architect out there checking out these guys and make ensure
that they're doing what they're supposed to be doing. And

(25:03):
while we're at it, let's discuss warranties. Now, a lot
of people believe that builders are at least required to
warranty the structure for eight years in South Carolina. Now,
it's not true. The state of South Carolina does not
require the builders to warranty anything at all. Builders are
simply required to guarantee that the home is habitable and

(25:25):
free from defects. However, a lot of builders do offer
an express warranty that covers certain items in systems for
a set period of time. So why do a lot
of people, including agents even think that there's a structural
warranty for eight years in South Carolina. It's because South
Carolina does have what's called a statute of repose, which

(25:48):
states that in most cases, a lawsuit for damages based
upon a defective or unsafe condition of an improvement to
real property must be brought within eight years after substantial
completion of the improvement. So if you do have a defect,
you have eight years to go back and go after
these guys, including the builder. Now, the statute of limitation

(26:11):
still applies, which means that you have to file that
lawsuit within three years of discovering the problem, and in
general you have eight years overall. But it's not a warranty.
It's called a statute of repose. Now, I'm not a lawyer, so,
as with everything, especially these days, always consult an attorney,

(26:32):
not only about warranties, but before signing any construction contract.
When you're undertaking a new construction project, attorneys and inspectors
will be some of your best friends. So I guess
that's the lesson for today. Inspectors and attorneys are your friends.
The government not so much. So. As always, if you

(26:52):
have any questions that you want to dressed on the show,
reach out to me. You can do that directly, just
look me up, Google me. Michael Blaze five Star Real Estate,
Michael Blaze five star real estate and reach out however
you so choose, you'll be able to find my email.
You can go to my website Michael Blaze real Estate
dot com Michael Blaze real estate dot com. You can

(27:15):
reach me that way. So if you have any questions,
and I always tell everybody you know, I'm not a
hard sell salesman. I'm not your typical salesman where I'm
trying to overcome your objections. ABC right always be closing.
That's not me. You can feel safe reaching out to
me asking me a question. I'll help you the best
I can with advice anyway, and then that'll be that

(27:39):
I'm not, you know, and then constantly pestering you and
you go on my list not my drip campaign and
all of that. So feel free to reach out. If
you have a question, whether it has to do with
real estate or contracts or even the maintenance of your house,
feel free to reach out. You can find me Michael
Blaze real estate dot com, Michael Blaze real estate dot com.
Just about out of time today, creche you listening to

(28:00):
You're Home three sixty. You can find past episodes of
the show online at ninety four to three WSC dot com.
Or just go to your iHeartRadio app and look for
your home three sixty with Michael Blaze and you'll find
all the past episodes there. Enjoy the rest of your weekend.