II. Deed Recording Fee

• Library: Practical Guide to Commercial Real Estate in South Carolina (SCBar) (2024 Ed.)

II. Deed Recording Fee

A. Recording Fee

South Carolina Code Ann. § 12-24-10 imposes "for the privilege of recording a deed in which land and improvements on the land, tenements, or other realty is transferred to another person" a fee in the amount of $1.85 for each $500 (or fractional part thereof) of the realty's value. The fee is composed of two fees: a state fee of $1.30 for each $500 (or fractional part thereof) of the realty's value; and a county fee of $.55 for each $500 (or fractional part thereof) of the realty's value.²⁴⁸ No fee is required until the deed is recorded. The fee is collected at the clerk of court or register of deeds.²⁴⁹

B. Value

The value of real property subject to the deed recording fee is determined under S.C. Code Ann. § 12-24-30 which defines the term "value" as:

SECTION 12-24-30. "Value" defined.

(A) For purposes of this chapter, the term "value" means the consideration paid or to be paid in money or money's worth for the realty including other realty, personal property, stocks, bonds, partnership interests, and other intangible property, the forgiveness or cancellation of a debt, the assumption of a debt, and the surrendering of a right. The fair market value of the consideration must be used in calculating the consideration paid in money's worth. Taxpayers may elect to use the fair market value of the realty being transferred in determining fair market value of the consideration under the provisions of this section. However, in the case of realty transferred between a corporation, a partnership, or other entity and its stockholder, partner, or owner, and in the case of realty transferred to a trust or as a distribution to a trust beneficiary, "value" means the realty's fair market value.

(B) A deduction from value is allowed for the amount of any lien or encumbrance existing on the land, tenement, or realty before the transfer and remaining on the land, tenement, or realty after the transfer.

(C) Taxpayers may elect to use the fair market value as determined for property tax purposes in determining fair market value under the provisions of this section.

The statute provides taxpayer with some flexibility in determining "value" as it can mean: (i) the value of the consideration paid; (ii) the fair market value of the realty being transferred; or (iii) the "value" of the property for property tax purposes. In addition, a deduction is allowed for any lien or encumbrance existing on the property immediately before and after the date of transfer.

The Department of Revenue's reading of this section is more restrictive. Under Department of Revenue's interpretation, if realty is transferred for money and is not a transaction involving a business entity and its owners or a trust, then the basis for the deed recording fee is the money paid or to be paid.²⁵⁰

If realty is transferred for property other than money or services and is not a transaction involving a business entity and its owners or a trust, then the taxpayer can base the deed recording fee on (i) the fair market value of the consideration paid, (ii) the fair market value of the realty being transferred, or (iii) the fair market value, as established for property taxes purposes, of the realty being transferred.

If realty is being transferred between a corporation, a partnership or other entity and its stockholders, partners or owners, or if the realty is being transferred to or from a trust (to the trust beneficiary), then the deed recording fee is imposed on (i) the fair market value of the realty being transferred, or (ii) the fair market value for property tax purposes of the realty being transferred.²⁵¹

Presumably, a tract of land with an appraised value (for property tax purposes) of $200,000 and with a fair market value of $300,000 which was exchanged for a sport fishing boat with a $150,000 value could utilize the consideration received (the boat with a value of $150,000) as the "value" for transfer tax purpose.

C. Liability for Fee

While the grantor is primarily liable for the payment of the recording fee, the grantee is secondarily liable for the payment of the fee.²⁵² An exception to this rule is made in the case of a sale by the federal government, a state or any of its political subdivision, or in the case of a master-in-equity deed or a deed from a qualified retirement plan. In these cases, the recording fee is imposed on the grantee, not the grantor.²⁵³

D. Exceptions

1. Deed of Distribution/Gifts

A deed of distribution from an estate or trust is not subject to the deed recording fee.²⁵⁴ A deed transferring realty as a gift is not subject to the deed recording fee.²⁵⁵

2. Transfers of Realty Less than $100

Transfers of realty with a value equal to or less than $100 is exempt from the deed recording fee.²⁵⁶

3. Transfers to the Federal or State Government

Transfers to the federal or state government, their agencies and departments and their political subdivisions including school districts are exempt from deed recording fees.²⁵⁷

4. Exempt Transactions

Deeds otherwise exempt under the laws of the state of South Carolina or the United States.²⁵⁸

5. Transfers Between Spouses

Transfers of realty between spouses or incident to divorce in which no gain or loss is recognized by reason of Section 1041 of the Internal Revenue Code of 1986, as amended, is exempt from deed recording fees.²⁵⁹

6. Partition Actions

No deed recording fee is imposed on deeds recorded in order to partition realty as long as no consideration is paid for the transfer other than the interests in the realty that are exchanged to effect the transfer.²⁶⁰

7. Grave Spaces

Transfers of individual grave spaces at a cemetery owned by a cemetery company licensed under Chapter 55 of Title 39 are exempt from the deed recording fee. Presumably grave spaces at a cemetery not owned by a licensed cemetery company would not be exempt.²⁶¹

8. Timber

Timber deeds are not subject to the deed recording fee.²

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