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South Carolina - Don't be Over Assessed After a Sale

by Kevin Baker, Atlanta, December 2013

 

When South Carolina properties are sold or transferred, they are reappraised by the county at current market value. However, there are ways for new owners to manage and minimize their property tax expense. An exemption is available that can lower a property's assessed value by 25%, which can provide property owners with both immediate and long-term property tax savings.

 

Who Qualifies?

 

Owners of commercial and non-primary residential property may qualify for the property tax exemption following an Assessable Transfer of Interest (ATI) as outlined in Section 12-37-3150 of the Tax Code. It applies to almost any transfer, including partial sales or transfers from one entity to another.

 

How Does it Work?

 

Often a property's purchase price is considered to be fair market value. Nevertheless, if the sale is not considered to be an arm's length transaction, the assessor can appraise the property at his own opinion of market value based upon data such as rents, vacancy, comps, etc.

 

When a property is reassessed higher than the previous county market value, the new owner can benefit by filing for an exemption. The exemption reduces the value to the higher of either the previous market value, or 75% of the new assessed value.

 

File by January 31

 

The 25% tax exemption is not automatic. New owners must apply to the county assessor by January 31st for the tax year they first become eligible. If the exemption is granted, no further action is necessary.

 

 

Avoid Misconceptions

 

South Carolina has a 15% cap on increases in value from one assessment to the next. When the capped value is below the market value, it becomes the "taxable value."

 

It's important to understand that the cap rule does not apply when a property is sold or transferred. It's a common misconception that the value can be reduced to the previous "taxable value."