South Carolina Property Tax Changes Could Stimulate Market

The South Carolina State House passed a bill unanimously on Wednesday of this week that may have a positive impact on real estate sales in Beaufort County and the state as a whole, provided the State Senate follows suit.  Current state law requires an immediate increase of the assessed value of residential and commercial property when property is sold or extensively improved.  The new value is based upon the new market price, which in the case of a transfer is the sales price.

The new bill delays the increase in assessed value to the date when each South Carolina County completes its next reassessment, which occurs by law every five years.  The next reassessment in Beaufort County is scheduled in 2009.  Typically assessed values on property are significantly lower than market value and many home-buyers in the recent past have been shocked to learn that the taxes they will pay are as high as twice that paid by the previous homeowner.  In some cases in Bluffton and Hilton Head Island, this has lead to contract cancellations.

Though nobody would say that the current market slump is a result of property tax policy, in a market that shows some signs of stabilizing, any stimulus can have a very positive impact.  This may be another factor, along with price declines and historically low interest rates, that convince buyers that current conditions are about as favorable as they will ever be.