The Post and Courier is in the middle of a three-day package on the state budget troubles and rightly pins it on Act 388, which replaced residential property taxes for schools with a one cent increase in the sales tax. Revenues from the penny are already $81 million short. The story makes a good point that finding the money to fund that hole pulls money from other state funds for schools — meaning that schools are taking it on the chin.
Then the story quotes Realtors who claim the point-of-sale reassessment of property (also included in the bill) is ruining housing sales left and right. It’s so ridiculous it’s laughable.
On top of the funding problems, real estate professionals, including Read, now say the changes in property tax laws are hurting the real estate market.
That’s because of a provision that requires properties to be immediately reassessed when they change hands. Despite the current real estate downtown, reassessment would mean a tax increase in most cases.
The South Carolina Realtors say the law is depressing sales.
“This point-of-sale assessment, we did our best to try and keep that out of it,” Read said. “We’re trying to get the Legislature to eliminate that.
“Just about every Realtor has lost sales,” he said. “I hate to tell you how much my income is off.”
First, reassessment is inevitable. The problem the state was fixing with this part of the bill was that someone who just spent $2 million on a home could be paying taxes on the home as if it was valued at $750,000. Do you know who makes up the difference? Every other taxpayer in that county.
Any prospective property owner — ANY prospective property owner should expect to pay property taxes on a home equal to the amount they’re paying for the home. What the state did was to correct a loophole and Realtors shouldn’t gripe like its bad for homebuyers to get the cold hard truth up front about what they’ll pay in taxes.