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When South Carolina lawmakers approved major property tax reform
in 2006, they capped value increases and required properties be
reappraised when an assessable transfer of interest (ATI)
occurs.
Problems with ATI Reappraisals
The threat of mandatory
reappraisals following an ATI is proving to be a deal-breaker
for thousands of commercial transactions. That’s because when
properties change hands, they are immediately reassessed,
usually at the full sales price. The increase, which can be more
than the 15% cap, shows up on the following year's tax bill and
raises the expense ahead of schedule.
The law impacts both commercial
and residential property owners. And it isn't just owners that
are affected. Most offices and retail stores have leases that
allow property tax increases to be passed on to them, meaning
businesses face higher taxes after an ATI whether they rent or
own.
Modifying the Tax Reform
House Bill 4942 revamps the law starting January 1, 2009.
Instead of reassessing properties in the year that an ATI
occurs, the reassessment would not happen until the next regular
cycle. This keeps all properties on the same 5-year reassessment
schedule.
HB 4942 doesn't address how to
make up the millions of dollars in city, county and school
district tax revenue that would be lost by delaying ATI
reassessments.
The measure was unanimously
approved in the House and sent to the Senate in late April.. |
