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Sunday, November 22, 2009

Real Estate Agents Argue Fairness Of "Point Of Sale" Property Tax Law

This article serves as proof Sen. Larry Martin is planning to change laws that will favor the schools and hurt property owners.

As reported in The (Charleston) Post and Courier:

South Carolina's property tax revisions of 2006 were set up to benefit homeowners and those who own the same property for many years, but those same changes resulted in big tax increases for anyone who bought property starting in 2007.

"I recognize the conundrum we've gotten ourselves into with local governments,"
said Sen. Larry Martin, R-Pickens.

[His] proposal is the basis for pending Senate legislation.

"My counsel back to them is that this is not an attack on their revenue stream but an attempt to keep South Carolina poised for growth."

The current laws took effect following overwhelming voter approval of a 2006 constitutional referendum.

The changes eliminated most school taxes on owner-occupied homes, raised the statewide sales tax by 20% in an attempt to make up for that lost revenue, and capped increases in the taxable value of any property that hadn't been sold or substantially improved to 15% every five years.

"A lot of property in South Carolina is bought as an investment, not as a home," Martin said.

"I heard the loudest complaints about point-of-sale out of the Charleston area in the spring of 2007, shortly after the law became effective."

In South Carolina, all properties are reassessed about every five years, as they were before the laws changed, but now a property's taxable value can only rise by 15% during a general reassessment. A 15% increase over five years is historically a modest rise, around the average rate of inflation, so the county-wide reassessments now have a limited impact on tax bills.

There already have been several versions of the proposed changes, which began earlier this year when the House passed bill 3272. The latest version of the bill was approved by the Senate Finance Committee, and would put a 15% cap on point-of-sale reassessments.

The Senate is expected to take up the potential property tax law changes in January.

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