South Carolina taxes capital gains at 6.2%. Combined with federal taxes, your effective rate on a home sale could reach 25.0%.
SC State Rate
6.2%
Top rate; 44% deduction available
Federal Rate
15%
Most common long-term bracket
Combined Effective
25.0%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If South Carolina is where your primary residence is located and you've lived there at least 2 of the last 5 years, you can exclude up to $250K (single) or $500K (married filing jointly) of your capital gain from both federal and state taxes.
Investment and rental properties in South Carolina don't qualify for the exclusion. You'll owe 6.2% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In South Carolina, homes sold in February sell for 6% more than those sold in October (-7%). Timing your sale right can offset a significant portion of your tax bill.
Capital gains tax rates on home sales in South Carolina and nearby states.
| State | Rate | Tax on $150K Gain | Notes |
|---|---|---|---|
| 4.5% | $6,750 | Flat tax rate (2026) | |
| 5.39% | $8,085 | Flat tax rate (2026) | |
South CarolinaYou | 6.2% | $9,300 | Top rate; 44% deduction available |
Selling in North Carolina instead of South Carolina would save $2,550 in state tax on a $150K gain.
South Carolina taxes capital gains at rates up to 6.2%, but offers a generous 44% deduction on net capital gains, effectively reducing the rate to about 3.5%.
This deduction makes SC more competitive than its headline rate suggests, comparable to North Carolina's 4.5%.
Charleston, Greenville, and Myrtle Beach are the primary markets. Charleston's luxury market can generate substantial gains.
SC is popular with retirees, who benefit from the combination of the capital gains deduction, no tax on Social Security, and generous pension exclusions.
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