Narrowing 15 articles on ‘point-of-sale’ tax is difficult. At issue is the 2006 law that requires property to be taxed based on its value (Sold Price) which the Realtors want repealed because it makes the taxes for the buyer MUCH higher for the buyer than they were for the seller.…This is especially BAD for commercial RE & 2nd home owners who must already pay MUCH MORE than 50% above occupied (primary) homes taxes. The potential purchasers (mostly investors) are quite savvy these days & want to know ALL their costs…& CAN go elsewhere - & frequently DO! Therefore, the Seller can’t sell, the Realtor doesn’t make ‘a deal’ here, & the state doesn’t get the transfer tax OR the higher point of sale tax. Over the past few weeks, several compromises, or ‘proposed bills’ were considered by the legislators in Columbia BUT actually they were TOO far from the original to barely recognize!!! The county & city gvts NEED more revenue & believe they NEED this ‘extra’ income to operate…but they fail to realize that if people won’t be buying - then there won’t be this ‘extra’ income! An article in The State, 2/16, summed it up well: “The reason the compromise doesn’t work is that it ignores the underlying problem: the part of the 2006 law that stripped all pretense of fairness from our property tax system. Under that law, referred to as Act 388, the taxable value of property cannot be increased by more than 15% every 5 years, no matter how much more it’s worth; so if your property appreciates at less than 15% - as most property does, even in a RE bubble – you pay taxes on its full value, while those whose property appreciates more do not. Yes, it’s unfair that identical properties are subject to VASTLY different taxes. But the point-of-sale provision doesn’t create that inequity. The 15% assmt creates that inequity. That’s what needs to be eliminated.” But in an election year…none of the legislators wants to have their name associated with THAT….& so it probably will not be ‘handled’ this year. I do feel sorry for the Sellers who REALLY want to sell – some really need to sell…such as our older folks who owned their home for the past 20 or 30 or more years & are presently paying a smaller tax but can’t keep up the maintenance of their ‘large’ homes because they are on a small fixed income. If they WANT to move to a smaller, newer place- (single fam or condo)- they can’t because 1) they can’t sell it easily with the point-of-sale in place & 2) they can’t afford the new taxes on where they want to move to! So their homes will deteriorate & they’ll be unable to enjoy a smaller, ‘maintenance-free’ life. Meanwhile the municipalities cry about the estimated $35Mil in tax revenue for local gvts & schools which the point-of-sale would take away. So the unfairness in property taxes will probably continue. A Taxation Realignment Commission was established last year to figure out WHAT TO DO - but they were told they must stay away from the residential homeowner exemption for school operating taxes, etc. This made the study a fool’s errand by EXCLUDING items from consideration & that study was to be completed by 3/15 but will need an extension to 11/15! However, it really should expand the scope of the commission’s work to include the entire property tax reform law. In other words, to get rid of inequities, it needs to include the school operating tax exemption, the 15% cap on reassessments for property that doesn’t change hands & the point-of-sale provision for property that does.
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