Short answer: A Hilton Head second home is assessed at 6% of market value (SC Code 12-43-220(e)) and pays the full school operating levy that legal residences don't. In district 510, tax year 2026 millage at 6% is 249.0 mills, so a $900,000 second home owes about $13,446 a year before exemptions. If you notify the Beaufort County Assessor before January 31 of your first tax year, a 25% exemption on the new value applies (12-37-3135), bringing that to about $10,085 when the seller's value on the books is $675,000 or less.
Key facts
- Ratio: 6% of market value for second homes, vacation homes and rentals (SC Code 12-43-220(e); SC Department of Revenue).
- 2026 millage at 6%: district 510, 249.0 mills; 520 Broad Creek, 251.3; 550 South Beach and 553 Forest Beach, 241.3 (Beaufort County Auditor).
- School operating levy: 126.1 mills of the district 510 total, paid only at 6% (Act 388 of 2006).
- 25% exemption: on the new market value after a sale, with the value on the books as a floor (12-37-3135).
- Deadline for the exemption: notify the Assessor before January 31 of the first tax year; you don't refile while you own it at 6%.
- Homestead exemption: not available on a second home; it applies to the dwelling that is your legal residence (12-37-250).
- Rental tax: nightly rentals add 10% tax on rent (7% state, 3% Town), separate from property tax.
Why is a second home taxed so much more than a primary home?
Two separate rules stack. First, the assessment ratio is 6% instead of 4%, so the assessed value is 50% higher. Second, Act 388 of 2006 exempts 4% homes from school operating taxes, and second homes keep paying them. In district 510 the school operating levy is 126.1 mills, more than half of the 249.0-mill total.
Here is a $900,000 home in district 510, tax year 2026:
- Second home: $900,000 x 6% = $54,000 assessed. $54,000 x 249.0 / 1,000 = $13,446.00.
- Legal residence: $900,000 x 4% = $36,000 assessed. $36,000 x 122.9 / 1,000 = $4,424.40.
Some local guides tell second-home buyers to multiply a primary-home bill by 1.5. That gives $6,636.60 here, less than half the real bill. The missing $6,809.40 is exactly the school operating tax ($54,000 x 126.1 / 1,000).
How does the 25% exemption lower a second-home bill?
It takes 25% off the new market value set by your purchase, as long as that doesn't drop below the value the County already had on the books. SC Code 12-37-3135 gives this exemption to 6% property after an assessable transfer of interest, such as a sale.
| Purchase price (district 510) | 6%, no exemption | 6%, with 25% exemption | Saved each year |
|---|---|---|---|
| $600,000 | $8,964.00 | $6,723.00 | $2,241.00 |
| $900,000 | $13,446.00 | $10,084.50 | $3,361.50 |
| $1,500,000 | $22,410.00 | $16,807.50 | $5,602.50 |
The "with exemption" column assumes the value on the County's books is no more than 75% of the price. If the books show more, that number is your taxable value. Example: a $900,000 purchase where the books show $750,000 is taxed on $750,000, or $11,205.00. See point-of-sale reassessment for the full rule.
The exemption isn't automatic. The owner or the owner's agent must tell the Assessor the property will be taxed at 6% before January 31 of the first tax year you claim it (12-37-3135(C)). Your purchase value is first taxed the year after you buy (12-37-3140(E)), so for a 2026 purchase that most likely means notifying before January 31, 2027. Confirm the year with the Assessor's office and keep a copy of what you send.
Does renting the home change the property tax?
No, a rental is taxed at 6% just like a second home, so renting it out doesn't raise the property tax further. What renting adds is other taxes and fees:
- Tax on rent: 10% on nightly rentals on Hilton Head: 5% state sales tax, 2% state accommodations tax, 1% Town accommodations tax and a 2% Town beach preservation fee (SCDOR; Town of Hilton Head Island). Pages quoting 11% are out of date: the county's 1% Green Space sales tax ended March 1, 2025.
- Town permit: a short-term rental permit for rentals under 30 days, $150 per bedroom per year since March 31, 2026, in an individual's name, and not transferable to a buyer. See the short-term rental permit.
- Town business license: required for all property rentals, separate from the permit.
Some communities add their own rules or fees. Sea Pines CSA, for example, charges an annual rental registration fee of $300 to $1,000 depending on bedrooms (effective 2023, Sea Pines CSA).
Can I get the 4% rate on a Hilton Head second home?
No. The 4% ratio is only for your legal residence, and you can have only one. The application is signed under penalty of perjury, and the penalty for a false claim is the full tax saved plus 0.5% a month (12-43-220(c)(2)). If you plan to move to Hilton Head, the island home becomes eligible once it's your legal residence, and a home that's your legal residence for any part of a year gets 4% for the whole year.
A homeowner who makes Hilton Head their legal residence can rent the home up to 72 days a year and keep 4%. The 14-day rule many sites quote is an accommodations tax rule, not the property tax limit. See 4% vs 6%.
What should a second-home buyer budget for?
Use the post-sale number, not the seller's bill. The steps we suggest:
- Find the tax district and the value on the books on the County's property record.
- Estimate the bill at 6% on your price, then with the 25% exemption and its floor, in the property tax calculator.
- Expect your first bill to reflect the seller's value and ratio, then the new value the next year.
- Send the January 31 notice.
- Add POA or regime dues, insurance (wind and flood), and, if renting, the permit, license and rental taxes.
How we help
For every second home or rental you look at, we'll pull the tax district and the County's current value and show you the 6% bill with and without the 25% exemption. If you'll rent it, we'll also request the community's rental rules with the resale documents so you know what's allowed before you offer.
Questions
Can I use the over-65 homestead exemption on a second home?
No, the homestead exemption applies only to the home that's your legal residence (SC Code 12-37-250). If your Hilton Head home becomes your legal residence and you're 65 or older with a year of South Carolina residency, you'd get both the 4% ratio and the homestead exemption.
What happens if I miss the January 31 notice?
The 25% exemption doesn't apply for that year, and the statute doesn't give a late-filing route the way it does for 4%. On a $900,000 home in district 510 that's about $3,361 more in tax. Contact the Beaufort County Assessor right away to ask about the following year.
Does owning a second home in an LLC change the property tax?
The ratio is 6% either way, so the bill is the same. The difference shows up later: selling more than half of the LLC is a taxable transfer that resets the value and must be reported to the Assessor within 45 days (12-37-3150). The Town also issues short-term rental permits only to individuals, not LLCs.
Sources
- SC Code Title 12 Chapter 43 (12-43-220, assessment ratios), SC Legislature (checked October 2026)
- SC Code Title 12 Chapter 37 (12-37-250, 12-37-3135, 12-37-3140, 12-37-3150), SC Legislature (checked October 2026)
- Millage information and tax year 2026 millage card, Beaufort County Auditor (checked October 2026)
- Property tax exemptions, SC Department of Revenue (checked October 2026)
- Accommodations tax and beach preservation fees, Town of Hilton Head Island (checked October 2026)
- Rental registration program, Sea Pines Community Services Associates (checked October 2026)