A proposal to eliminate hikes in taxable value when properties are sold passed the S.C. House of Representatives on Thursday, and its fate now rests with the Senate, where past point-of-sale reforms have died.
The House approved the measure -- H. 3713 -- by a 60-45 margin. A companion bill in the Senate -- S. 647 -- has not yet been voted on outside of committee.
One of its Senate co-sponsors, Sen. Tom Davis, R-Beaufort, said the bill is unlikely to come up for a full vote before the end of the session
"The problem is, we're on the budget right now, and that's likely to take up next week; and then after that, we're likely to be talking about redistricting," Davis said. "We're only talking about a handful of days left in this Senate session."
But because this year is only the first half of a two-year session, Davis said, the bill will retain the progress it has made so far and doesn't have to start back at square one when lawmakers reconvene in January.
Real estate agents have argued strongly for repeal of the point-of-sale rule. A group from Beaufort County visited Columbia in February and delivered that message in person.
Some local government groups, among them the S.C. School Boards Association, have opposed the change, which they say could cost them millions in lost tax revenues.
Before the point-of-sale rule, which was included in Act 388 of 2006, tax values on property only changed every five years after a countywide reassessment. Act 388 also exempted owner-occupied houses from school operating taxes and included a statewide penny sales tax to recoup lost revenue.
Real estate agents have argued those provisions result in different tax bills for similar properties -- which turns off potential buyers.
"The second homeowner doesn't want to buy real estate in the state of South Carolina because of the inequities in the tax structure," said Andy Klepchick, a Hilton Head real estate agent who serves as legislative chair for S.C. REALTORS.
Sen. Davis and Rep. Andy Patrick, R-Hilton Head, support reform of the point-of-sale provision, but both said deeper changes are needed as well.
"I hope that this is a step toward an overhaul of Act 388 and a comprehensive overhaul of our tax code," Patrick said. "I hope that this is an impetus for getting there."