The bill would let owner-occupied homes, or those currently assessed at 4 percent of the property's actual value, keep the same appraised value until they are sold. That means that no matter how long an owner holds the property, the taxable value wouldn't change unless an improvement was added.
When the property is sold, it would be reappraised, and the new owner would pay taxes based on the purchase price.
The bill, which creates a system dubbed "point-of-sale reassessment," seems to be the one major bill dealing with property assessments that has the most support in the state legislature.
"It's an effort to let people continue to live in a community they want to live in without being taxed out of the area," said Rep. Ronny Townsend, R-Anderson, the bill's chief sponsor.
The state Board of Economic Advisors estimates the legislation would result in a tax shift of about $169 million at the end of five years to other types of property.
The South Carolina Association of Counties warned that the legislation may be unconstitutional because it treats taxpayers differently and doesn't follow a state constitution requirement that property be taxed at a fixed percentage of its actual or fair market value.
Reps. Richard Chalk, R-Hilton Head Island, and Bill Herbkersman, R-Bluffton, both said they might support the bill but want to find a solution that turns back last year's reassessment in Beaufort County. Herbkersman has filed a bill that would allow counties to throw out 2004 reassessments and use the values from previous years, but it hasn't even had a committee hearing.
"It would not give any tax break or any relief to those people that experienced those exorbitant increases in Beaufort County," Chalk said Wednesday.
He said he would rather see the bill allow homeowners to lock in taxable values from some year before 2004.
Chalk also said he prefers a bill he is sponsoring that would cap increases in tax bills at 15 percent, but that bill hasn't had a committee hearing yet. Chalk admits his bill would create a headache for local officials trying to calculate a tax rate.
Chalk, a real estate agent, also worried that allowing homeowners to lock in at the same taxable value for the entire time they stay in their home could have a chilling effect on the real estate market. For example, a couple who had lived in a house for 30 or 40 years and eventually wanted to move to a smaller house might be hesitant to do so because property taxes would skyrocket as soon as they bought a new house, he suggested.
"Being a Realtor," he said, "I think it would have a depressing effect on people's willingness to sell a property."