Council will not oppose law change

Charleston County Council has decided not to oppose state legislation that could end the practice of reassessing properties when there's a change in ownership, although the county government likely would have to cut spending or raise taxes if the law were to pass.

Councilman Vic Rawl urged his colleagues at a committee meeting Thursday to join the state Association of Counties in opposing the state legislation but found no support.

"It's a horrible idea," Councilman Joe McKeown said.

McKeown and Councilman Elliott Summey said the proposed change in state law is needed because property tax changes approved in 2006 are killing commercial real estate sales and unfairly taxing homeowners who bought property after 2006.

Summey, who is in the commercial real estate business, said shopping centers are "going dark" all over the Lowcountry because the taxes rise sharply if they are sold, the tax increases are passed on to tenants, and the tenants move out.

Opponents of changing the law agree that the property tax changes of 2006 were flawed, but they say the propose solution would just make things worse.

Rawl said the legislation is being portrayed as tax relief, which it is not because most property owners would end up paying more if property tax relief is extended to those who buy existing buildings.

"This is not about across-the-board property taxes," he said.

At issue are the reassessments of property known as point-of-sale, or assessable transfer of interest. The way it works is, if a property's ownership changed after 2006, the property is reassessed the following year at full value, usually resulting in big tax increase for the owner.

The so-called ATI reassessments were intended as a way to return properties to their true taxable value when they are sold, as part of a new property tax system that protects existing property owners from full reassessment for as long as they own their properties.

The ATI reassessments first appeared on the tax rolls in 2008, ramping up property taxes for everyone who purchased property in 2007, and that's when the demand for legislative changes began. The current version of the proposed legislation aimed at addressing those complaints would limit reassessments on newly-sold property but would not roll back the ATI reassessments of 2008 and 2009.

New construction would remain taxed at full value.

The legislation also would make an estimated $44 million in annual revenue disappear from local government, county and school district budgets statewide, the Board of Economic Advisors has estimated.

The result would be a shifting of some property taxes back to current home and business owners, constraints on the budgets of local schools and governments, or both.