For those wanting to buy a second home in Charleston or a commercial venture, good news happened yesterday. The SC Senate voted in favor of a bill that will eliminate the “Point of Sale” Reassesments on commercial properties and second homes.
For homes sold in 2010, the bill states thatthe property’s taxable value can not increase to more than 80% of the sales price when it changes ownership. Instead of taxable values increasing to the full sales price, which is the current policy. The 2006 law currently in place updates the taxable value of a property to its sales price when it changes hands.
Even with reduced pricing, the sales prices are often higher than the older values on the tax rolls. The resulting tax increase can cause the new owner to have a much larger tax bill and resulting mortgage than is advisable . This new bill is a way to help the real estate market and spur new investment in the state.
Property currently valued (taxed) at $100,000 sold for $200,000, the new taxablevalue would be $160,000. (80% of the sales price)
“McConnell, a Charleston Republican, acknowledged the deal isn’t perfect. “This bill, it’s not an attempt to put equity into the formula, but somehow to jumpstart some economic activity,” he said. The senate passed the bill by a voice vote on second reading. It must receive third reading and then go to the House of Representatives before it could be sent to the governor.”