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Sponsors: Reps. Chalk, Herbkersman, Ceips and Bowers
Document Path: l:\council\bills\swb\6250htc05.doc
Introduced in the House on February 2, 2005
Currently residing in the House Committee on Ways and Means
Summary: Property tax exemption for owner-occupied and commercial real property
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 2/2/2005 House Introduced and read first time HJ-7 2/2/2005 House Referred to Committee on Ways and Means HJ-8 2/2/2005 House Member(s) request name added as sponsor: Herbkersman 2/9/2005 House Member(s) request name added as sponsor: Ceips 5/3/2005 House Member(s) request name added as sponsor: Bowers
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VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-37-223 SO AS TO ALLOW A PROPERTY TAX EXEMPTION FOR OWNER-OCCUPIED RESIDENTIAL PROPERTY AND COMMERCIAL REAL PROPERTY IN A COUNTY IN AN AMOUNT SUFFICIENT TO LIMIT TO FIFTEEN PERCENT THE INCREASE IN THE PROPERTY TAX ON SUCH PROPERTY IN THE YEAR OF IMPLEMENTATION OF A COUNTYWIDE ASSESSMENT AND EQUALIZATION PROGRAM OVER THE TAX DUE ON THE PROPERTY FOR THE PRECEDING YEAR, TO PROVIDE FOR THE DURATION OF THIS EXEMPTION AND THE CIRCUMSTANCES IN WHICH THIS EXEMPTION DOES NOT APPLY; TO AMEND SECTION 12-37-223A, RELATING TO THE COUNTY OPTION EXEMPTION LIMITING TO FIFTEEN PERCENT THE INCREASE IN VALUE RESULTING FROM A COUNTYWIDE ASSESSMENT AND EQUALIZATION PLAN, SO AS TO CONFORM IT TO THE PROVISIONS OF SECTION 12-37-223 AS ADDED BY THIS ACT, AND TO MAKE THIS EXEMPTION APPLY FOR REASSESSMENT PROGRAMS IMPLEMENTED AFTER 2004 WITH A SPECIAL PROVISION FOR COUNTIES WHICH IMPLEMENTED SUCH PLANS IN 2004.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Article 3, Chapter 37, Title 12 of the 1976 Code is amended by adding:
"Section 12-37-223. (A) For purposes of this section, real property means real property classified for property tax purposes pursuant to Section 12-43-220(c) and (e).
(B) There is exempted from property tax an amount of fair market value of real property located in the county sufficient to limit to fifteen percent the increase in the total property tax due on real property for the property tax year in which a countywide appraisal and equalization program conducted pursuant to Section 12-43-217 is implemented over the total property tax on the real property for the prior property tax year. The exemption allowed by this section does not apply to:
(1) a tax increase resulting from value attributable to property or improvements not previously taxed, such as new construction, and for renovation of existing structures and tax increase resulting from a change in classification or use of the real property; and
(2) taxes on real property transferred after the year in which the most recent countywide equalization program was implemented pursuant to Section 12-43-217.
(C)(1) Notwithstanding subsection (B)(2), the exemption provided in subsection (B) applies to property which has been transferred in fee simple in a transfer that is not subject to income tax pursuant to Sections 102, limited to transfer to a spouse or surviving spouse, (Gifts and Inheritances), 1033 (Conversions--Fire and Insurance Proceeds to Rebuild), 1041 (Transfers of Property Between Spouses or Incident to Divorce), 351 (Transfer to a Corporation Controlled by Transferor), 355 (Distribution by a Controlled Corporation), 368 (Corporate Reorganizations), and 721 (Nonrecognition of Gain or Loss on a Contribution to a Partnership) of the Internal Revenue Code as defined in Section 12-6-40;
(2) Notwithstanding Subsection (B)(2), and in addition to the nondisqualifying transfers allowed pursuant to item (1) of this subsection, the transfer of any interest in real property to a spouse, whether inter vivos, testamentary, or by operation of law, is a nondisqualifying transfer, and the exemption allowed pursuant to Subsection (B) continues to apply to the interest transferred.
(3) In the case of real property classified pursuant to Section 12-43-220(c), the exemption provided in subsection (B) continues to apply to:
(a) real property which has been transferred if the transferor returns a life estate in the real property and the transferor continues to occupy the real property as his legal residence and to real property; and
(b) real property which has been transferred to a trust if the transferor and settler is a life beneficiary of the trust and continues to occupy the real property as his legal residence.
(D) Once the fair market value of real property is reduced by the exemption allowed in subsection (B), that reduced fair market value remains the fair market value of the property subject to property tax except as otherwise provided in subsection (B)(1)or (2) until the implementation of the values determined in the next countywide assessment and equalization program, at which time eligibility for and the amount of a new exemption pursuant to this section must be determined and calculated. When real property is transferred such that the real property is no longer eligible for the exemption provided for in subsection (B), the real property is subject to being taxed in the tax year following the transfer at its value, as determined under Section 12-37-930, at current fair market value as determined by the county assessor.
(E) The closing attorney involved in a real estate transfer shall provide the following notice to the buyer(s):
REAL PROPERTY TRANSFERRED AS A RESULT OF THIS TRANSACTION MAY BE SUBJECT TO PROPERTY TAXATION DURING THE NEXT TAX YEAR AT A VALUE THAT REFLECTS ITS FAIR MARKET VALUE."
SECTION 2. Section 12-37-223A(A) of the 1976 Code, as added by Act 283 of 2000, is amended to read:
As authorized by Section 3, Article X of the South Carolina Constitution, the General Assembly hereby authorizes The governing body of a county by ordinance to may exempt an amount of fair market value of real property located in the county sufficient to limit to fifteen percent any valuation increase attributable to a countywide appraisal and equalization program conducted pursuant to Section 12-43-217. An exemption allowed by this section does not apply to:
(1) real property subject to the exemption allowed pursuant to Section 12-37-223;
(2) real property valued for property tax purposes by the unit valuation method;
(2)(3) value attributable to property or improvements not previously taxed, such as new construction, and for renovation of existing structures;
(3)(4) property transferred after the most recent countywide equalization program implemented pursuant to Section 12-43-217; provided, however, at the option of the governing body of a county which is in the process of first implementing a countywide equalization program under Section 12-43-217, property transferred on or after January first of the year of implementation of the most recent countywide equalization program."
SECTION 3. This act takes effect upon approval by the Governor and applies for tax on real property resulting from countywide reassessment program values implemented after 2004. In the counties in which a countywide assessment and equalization program was implemented in 2004, the exemption allowed pursuant to Section 12-37-223 as added by this act applies to the amount of fair market value of real property sufficient to limit to fifteen percent the amount by which property tax for 2005 exceeds the total of property tax on the parcel for 2003. However, there may not be included tax attributable to the value of improvements, a change in classification, or a change in use of the real property first subject to tax in 2004.
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