South Carolina Senate Bill S0125

South Carolina 2025-2026 Regular Session

• Introduced: 1/14/25
• Refer: 1/14/25
• Engrossed: 2/27/25
• Refer: 3/5/25

Caption

Property tax exemption

Impact

The legislation is expected to have several implications on state laws concerning property taxes and housing sector funding. By establishing a clear linkage between property ownership percentage and tax exemption eligibility, the bill allows for more precise tax liability assessments for non-profit housing that provide essential affordable housing options for low-income residents. It addresses potential overreach by ensuring that non-profits do not obtain full tax exemption when they do not hold complete ownership of the property, consequently encouraging accountability and preventing abuses of tax exemption privileges.

Summary

Bill S0125 seeks to amend Section 12-37-220 of the South Carolina Code of Laws, specifically targeting property tax exemptions for certain non-profit housing corporations. The main provision of this bill is that the exemption would apply only to the percentage of property that aligns with the non-profit corporation's ownership interest in that property. This approach aims to ensure compliance with federal safe harbor provisions governing property rentals and aid local government measures to regulate housing requirements. If enacted, this bill would influence how property tax exemptions are allocated for these organizations and require clear ownership accountability in relation to tax benefits received.

Sentiment

Sentiment towards Bill S0125 appears generally supportive within legislative discussions, reflecting a focus on increasing transparency and correlating tax relief with actual ownership. Advocates for the bill argue it optimizes tax systems and enhances the integrity of property tax exemptions intended for non-profit housing. However, there are concerns from some stakeholders about the potential burden on non-profits that may struggle to adhere to new compliance requirements, possibly impacting their operations or the affordable housing market.

Contention

A notable point of contention surrounding S0125 is the certification and documentation requirements introduced for non-profit housing corporations to maintain their tax exemptions. Critics argue this could impose an administrative burden that may detract from operational capabilities, particularly for smaller organizations. The bill’s language concerning the gradual phase-in of requirements raises questions about its practicality and effectiveness in fostering affordable housing without complicating the operational frameworks of non-profits.