Beaufort County Realtors cheered Thursday, while some local government officials lamented state lawmakers' compromise that changes how much properties are taxed when they are sold.
Realtors, who have lobbied in recent years for changing the "point of sale" law, said they were pleased but not totally satisfied with the compromise, which legislators approved and sent to Gov. Nikki Haley.
The issue has simmered since lawmakers and voters approved a series of property-tax changes in 2006 and 2007.
Real estate agents have argued those changes scuttled sales after buyers learned of their new, higher tax bills. Local governments have argued that eliminating point-of-sale would cut their revenue by $52 million and that other parts of the property-tax law prohibit tax increases to make up the difference.
The compromise would affect only commercial properties, rentals, second homes and other properties taxed at 6 percent of their value. The compromise makes no changes in the way owner-occupied homes are taxed.
Affected properties would receive a 25 percent discount from the sale price when their value is calculated for tax purposes. However, to minimize the impact on local governments, that discount could not reduce the new tax value to less than the property's previous assessed value plus a 15 percent cap.
Local governments are limited in the amount they can raise property-tax rates. Millage can be increased only to account for population growth and inflation. Governments that do not raise their rates to the maximum in one year can do so up to three years later, according to the compromise.
Realtors are pleased the compromise lessens impact on buyers of investment property, second homes and commercial property. They said it should spur real estate sales, job creation and economic development.
"It's a start," said Andy Klepchick, a Hilton Head Island Realtor who is legislative chairman for the S.C. Realtors association.
Karen Ryan, president of the Hilton Head Area Association of Realtors, said the compromise should help coastal areas more than other parts of the state and should make South Carolina's tax system more competitive with neighboring states.
Eric Gnau, chairman of the Beaufort County Association of Realtors' legislative affairs committee, said he hopes the compromise represents an initial step toward comprehensive tax reform.
Beaufort County government officials said they were disappointed with the bill.
"Any compromise is a detriment to the local governments," said Jerry Stewart, chairman of County Council's governmental committee.
Beaufort County assessor Ed Hughes, who favors repealing the act that brought point-of-sale and accompanying changes into effect, said the compromise appears "woefully short of what needs to be done." He said the compromise is likely to hurt the county's finances, but he didn't immediately know by how much.
Hilton Head officials were unsure how the compromise would impact the town's budget. Town manager Steve Riley said the "three-year look-back provision" could lessen pressure to increase property taxes.
Staff writer Tom Barton and The (Columbia) State contributed.