What are the rules for taxation of foreign real estate?
In South Carolina, foreign real estate is subject to the same taxes as domestic real estate. If the property is owned by a nonresident of the United States, the owner must pay a withholding tax on the rental or other income derived from the property as well as South Carolina income taxes. To compute the tax owed, the owner is required to submit Form 943, "Foreign Real Property Returns," to the South Carolina Department of Revenue. The owner of the foreign real estate must also pay ad valorem taxes to the local county tax collector or treasurer. If the property is used for commercial purposes, the owner must also pay local business license taxes. These taxes are based on the estimated value of the property. Local taxes may be paid annually or quarterly. Property owners must also abide by any property tax exemptions or credits available in South Carolina. For example, veterans and homeowners over 65 may qualify for reduced property taxes. The South Carolina Department of Revenue can provide more information on these exemptions. All foreign real estate owners should be aware of the reporting requirements in South Carolina. This includes filing an annual Form 943, Foreign Real Property Returns, with the South Carolina Department of Revenue. They are also required to include a copy of any income received from the property. The South Carolina Department of Revenue can provide more information on how to properly report foreign real estate income.
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