Thursday, January 15, 2009

Realtors call for property tax reform

By Mike Fitts
Published Jan. 14, 2009

The state’s new property assessment laws are unfair and are crippling the real estate sector, S.C. Realtors said Wednesday at the Statehouse.

The S.C. Realtors Association will be pushing this year to fix what it calls major problems with tax changes made in 2006, particularly the inequities caused by immediate reassessment of properties to their selling price and the different treatment of residential and commercial holdings.

Realtors Association CEO Nick Kremydas said the final shape of such a fix is still being crafted, with remedies from other states with similar laws, such as Florida, being examined. Too much business is being lost to rival states for the issue to wait for passage of a comprehensive tax reform plan, he said. “We created a competitive tax disadvantage in our tax code,” Kremydas said.

Kremydas said the immediate reassessment of a sold property to the selling price creates an unacceptable inequity. Two similar, adjacent properties can be paying much different property taxes because one sold recently, he said. Kremydas pointed to a recent survey by his group that found that 77% of those polled considered this unfair.

The group also hopes to give commercial and office properties the same tax advantages that were extended solely to homeowners. Kremydas said that commercial real estate is shouldering too much of the property tax burden and that it is an economic disincentive. Tax and millage rates will have to be changed while keeping a viable revenue flow for county governments, he said.

Leaders of the S.C. Realtors Association were flanked by supportive legislators, including some who work in the real estate industry. Rep. Alan Clemmons, R-Myrtle Beach, a real estate attorney, described one transaction that fell through when the prospective buyers, from out of state, learned that they would be facing a $600,000 tax increase when the deal closed. They bought a similar property in Georgia instead, he said.

Rep. Dan Hamilton, R-Greenville, emphasized the importance of the real estate and housing industries to the state’s economy. Hamilton is the operating partner of Keller Williams Realty in Greenville.

“We can’t wait,” he said. “We need to get our economy on a sure footing.”

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