While property taxes are always top of mind for many homeowners, especially along U.S. coastlines, Isle of Palms has the distinction of having the lowest coastal property taxes within a 100-mile radius.
But when comparing island property taxes to 10 other communities stretching from Hilton Head to just beyond the North Carolina border, potential home buyers have a number of other factors to consider.
“Every year, the state legislature will add in items or take some away,” said Charleston County Auditor Peter Tecklenburg. “We have many scenarios going on as to how taxes can affect people.”
For example, as of May 2026, the millage rate for IOP home properties stood at 0.2362.
All 4% home properties receive a Local Option Sales Tax (LOST) discount – $190 municipal and $820 per Charleston County. Additionally, all 4% properties carry a further property tax relief discount of $5,700. “And IOP residents with 4% properties do not pay for school operations, so the Charleston County School District millage is rebated back,” Tecklenburg said.
With all applied discounts, each IOP home property valued at $1 million and taxed at 4% pays $2,738 in annual taxes, lowest of all Charleston County communities. The same home in nearby Mount Pleasant would pay $3,526. For neighboring Sullivan’s Island, with its higher millage rate, taxes total $4,212. For the City of Charleston, annual taxes come to $4,584.
Tecklenberg pointed out that tax rates for unincorporated properties on mainland Charleston County are also higher because “people there get no LOST tax credits.”
Many IOP property owners engage in short-term rentals, which put their tax rate at 6%. These properties retain the LOST rebates, but lose the property tax relief. So annual taxes on a 6% IOP home valued at $1 million would rise to $13,162, which are still lower than any other community in Charleston County.
“Technically, Dewees and Capers have the lowest tax rates, but have no fire or trash service,” Tecklenberg said.
Other critical points also affect individual rates. One is the state tax cap. “There is a tax cap in South Carolina on how much we can raise the value of any property,” Tecklenberg said. “We do a reassessment every five years. If the property increases in value by 10%, we raise the taxes by 10%. But if it increases to any point past 15% in value, we cap the taxes at 15%.”
Then there are property values themselves, which have skyrocketed in the last 10 years. Based on reports by realtor.com®, median home prices for the City of Charleston rose from about $325,000 in 2016 to $675,000 in 2026.
For IOP, this median increased from about $800,000 to a whopping $2.5 million. On Sullivan’s Island, prices are almost double at $4.83 million. Folly Beach, on the other side of Charleston Harbor, comes in as the poor relative at only $1.18 million.
“When I first came to IOP in 2013, prices just for condos in Wild Dunes were $600,000-$700,000 – now they’re over $1 million,” said Cynthia Williams, owner and broker-in-charge of Weichert, Realtors-Lifestyle in Charleston. “And with area home prices higher now than in my 24 years of selling real estate, it’s more important than ever for people to know what their personal property tax rates will be before they buy a home.”
Folly Beach, however, has an equalizer hidden in plain sight: its millage rate is 0.2486 – only a small fraction more than IOP. So, if you bought a 4% tax home on Folly Beach at exactly its median price of $1.18 million, vs. $2.5 million on IOP, your annual taxes, while technically more by percentage, would come to only $3,294 – less than half of your IOP taxes, which would amount to around $6,845.
Of course, for both lower taxes and home prices, there is Hilton Head Island – if you don’t mind living 118 miles further south. Millage rates for Holden Beach, North Carolina – 145 miles north – are about half that of IOP.
Both, like IOP and any coastal property from Maine to Florida, are subject to king tides, hurricane weather and beach erosion. But even so, IOP carries some extra hidden tax relief, such as whether or not you are a senior citizen, legally blind, disabled, a disabled veteran or a longtime resident, in which case you would have the real tax advantage.
“People who bought property here years ago when land was relatively cheap are going to be in the best position in terms of keeping the home, selling the home and in the amount of annual taxes they pay,” Tecklenberg said. “Otherwise, you might want to consider just coming to the coast, paying your money for your stay and then going home without all the extra worries.”
By L. C. Leach III
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