CHARLESTON, SC—For the second time in recent weeks, Womble Bond Dickinson real estate attorney Morris Ellison joined Fox 24 News Now to discuss tax and real estate issues. In this interview, Ellison spoke about how small businesses in the Charleston may be impacted by taxes in the current COVID-19 pandemic environment.
“Property taxes are definitely going up,” Ellison said. A number of local municipalities have raised their tax rates for the current year. Combined with an increase in property values due to a county-wide reassessment, Ellison said tax bills can generally be expected to rise.
“We are in an environment where small businesses are scrapping for every dollar, and every dollar that goes to property taxes is a dollar that could go to other things – or to keep the business in business. It’s a real struggle,” he said. While other operating costs may go down as the result of the pandemic, taxes and insurance costs are relatively fixed, which puts small businesses under tremendous pressure when revenues are way down.
Ellison said small businesses which lease their space should ask their property owner if they can review the property tax reassessment and let them know they are concerned about possibly rising costs. Ultimately, the decision on appealing the revaluation rests with the property owner, but the tenant can voice their concerns, he said. Higher taxes make retail space less competitive with other retail space.
Ellison said that from retail bankruptcies appear to be even greater in the pandemic than in the 2008 Great Financial Crisis. Many national retailers have shuttered stores, laid off employees or, in some cases, gone out of business completely.
“This is as bad as the Great Depression—and it could get worse,” he said. Ellison added that rising property taxes likely will be passed on in the form of higher consumer prices.
Many retail property owners entered into forbearance agreements earlier this year, which allow them to temporarily postpone their mortgage payments. In many instances, that grace period will end on Dec. 31 for borrowers, and Ellison said that could create additional hardships in early 2021.
“I don’t think the full impact of COVID-19 has been felt on the retail economy,” he said.
Also, click here to watch “Appealing Your Home Value Reassessment” with Morris Ellison on Fox 24 News Now.