Legislature considers reassessment cap

Local governments and schools would take a big financial hit if the Legislature adopts a plan to cap the reassessment of properties when they are sold in South Carolina, but some local officials think the system created in 2006 is so bad that something must be done.

"We have neighbors who are living next to each other in similar housing needing the same county services, but one is paying this much and the other is paying that much (in property taxes)," Charleston County Councilman Joe McKeown said at a council committee meeting Thursday. "That's a problem."

"All things being equal, this is killing us," said McKeown, a real estate professional.

While associations representing local governments and schools are opposed to limiting point-of-sale reassessments, Charleston County Council is split down the middle.

Council may consider a resolution to take a position on the property tax legislation at a meeting at 7 tonight in the Public Services Building, 4045 Bridge View Drive, North Charleston. But Councilman Paul Thurmond doubts that state lawmakers would be influenced by such an action.

"Sometimes, I can't get them to call me back," he said at the committee meeting.

Councilman Vic Rawl has asked that council consider a resolution opposing the legislation.

At issue are the reassessments of property because of what's known as point-of-sale, or assessable transfer of interest. There's a lot of jargon involved, but the bottom line is that point-of-sale means a big tax increase for the owner of any property in South Carolina sold after 2006.

Under the old property tax system, all properties were reassessed -- essentially appraised for the purpose of collecting property taxes -- every five years.

Under the new system, properties are only taxed based upon what they are truly worth if they change ownership, or when a new building or major improvement is constructed.

Properties with no change in ownership are taxed based upon outdated values that can only be increased by up to 15 percent during a countywide reassessment.

Capping point-of-sale reassessments would rearrange the property tax burden once again.

State revenues would not be affected, but state lawmakers will make the decisions.

Business groups, real estate sellers and those who bought property after 2006 have complained loudly that the new system is unfair.

Under the proposed legislation, only new construction would be taxed at full value, creating another subset of aggrieved taxpayers.

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.

"I would say the vast majority of municipal council members understand the negative impacts this would have on community services," said Reba Campbell, deputy executive director of the SC Municipal Association. "It's such a complicated issue, and it's hard to explain to average citizens."

Reach David Slade at 937-5552 or dslade@postandcourier.com.