CHARLESTON, S.C.—Estimating the costs of real estate purchases or improvements, may not be the simple decision many purchasers anticipate at the time of purchase. Missteps at the time of closing can have a long-lasting impact on the property tax burden.
Womble Bond Dickinson’s Morris Ellison writes of these “Snakes in the Property Tax Woodpile” in a new article in Southeast Real Estate Business.
For example, Ellison said that a change in property ownership can, in some states, remove statutory caps that limit increases in assessed property value, causing a dramatic spike in property taxes. In other states, including South Carolina, a purchaser can qualify for a potential property tax exemption, but that exemption must be filed on or before Jan. 30. Too often, Ellison said purchasers aren’t aware they qualify for the exemption until after it is too late to file for the exemption.
Other hidden factors, such as the language in closing documents and the impact of property improvements, can create unsuspected increases in property tax rates.
The key, Ellison said, is thorough research and preparation before the transaction is closed. “With careful planning, the prudent property owner can avoid being bitten by the lurking snake of increased property taxes and walk the property tax trail with confidence.”
“Snakes in the Property Tax Woodpile: Real Estate Acquisitions and Improvements Harbor Traps for the Unwary Taxpayer” by Morris Ellison begins on page 19 in Southeast Real Estate Business.
Morris Ellison represents local, national and international investors, lenders, and real estate developers in the development, financing, and disposition of commercial properties and other assets. Ellison has experience in a variety of complex real estate and business-related issues including the development of several mixed-use projects, real property tax appeals, entity disputes and structuring and complex foreclosures and workouts. He leads Womble Bond Dickinson’s Israel Team and practices in the firm’s Charleston office.