Study: Point-of-sale reassessment makes taxes less equitable

Study: Point-of-sale reassessment makes taxes less equitable
Wednesday, 25 March 2009
Staff Report

COLUMBIA -- Immediate reassessment to sale prices is increasing tax inequity and restraining the market, according to a new study released by the S.C. Association of Realtors.

The association is trying to push its fix for point-of-sale taxation through a key S.C. House committee this week.

The study, conducted by Tim Allen, a professor in the real estate program at the College of Charleston, found that immediate reassessment had increased the inequities already present in South Carolina’s tax system. Tax rates are different for owner-occupied properties versus rentals, as well as for residential properties versus commercial.

Allen’s report found that the new law presses property owners to remain where they are if values are on the upswing, because the property assessment will jump up for any new home they buy. In a down market, Allen wrote, property owners might be motivated to purchase a different property of the same market value, because the tax assessment will decrease. That trend would tend to depress prices overall, the study said.

A bill supported by the S.C. Association of Realtors would block immediate reassessments, instead pushing assessments back into the regular five-year cycle.

Any properties affected so far would see their assessments rolled back to 2006 levels. The measure could go before the House Ways and Means Committee this week.

Published March 25, 2009




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