South Carolina just got a lot more boat-friendly. On March 31, 2026, Governor McMaster signed H.3858 into law, delivering the largest property tax cut for watercraft owners in the state’s recent history.
Here’s what’s changing and when.
The Tax Cut
The new law reduces the property tax assessment ratio on boats from 10.5% down to 6%, phased in over three years:
- Tax year 2027: Assessment ratio drops to roughly 9%
- Tax year 2028: Drops further to about 7.5%
- Tax year 2029 and beyond: Reaches the full 6% rate
Technically, the law exempts 42.8571% of a watercraft’s fair market value from property taxation. The end result is the same: you’ll pay significantly less in property taxes on your boat starting in 2027.
No More Separate Motor Titles
This is a big one. Previously, outboard motors 5 HP and above required their own separate title, which meant a separate $10 title fee on top of your boat’s registration. Under H.3858, boats and motors are now treated as a single taxable item.
Motors of 5 HP or more still need to be registered for identification purposes, but the separate titling requirement is gone. This eliminates what many boat owners considered double taxation.
Fee Changes
- Boat registration fee: Drops from $20 to $10
- Motor registration: $10 fee (for identification only, no separate title needed)
When Does This Take Effect?
The changes go into effect January 1, 2027. Your 2026 boat taxes are still under the current rules.
What This Means for Your BoatForms Paperwork
If you’re registering a boat in South Carolina right now, the current rules still apply: $20 combined registration and title fee, and separate motor titling for outboard motors 5 HP and above.
We’ll be updating BoatForms to reflect the new fee structure and motor registration changes ahead of the January 2027 effective date. When the time comes, the app will automatically calculate your fees under the new rules.
For now, if you need to register or transfer a boat in South Carolina, BoatForms has you covered with the current requirements.