South Carolina Property Tax Reassessment upon purchasing

mobile home university
1

Hello All,

We are currently under contract on a park in South Carolina. The current property tax basis is very low, but a standard deed transfer will trigger an ‘Assessable Transfer of Interest’ (ATI), effectively jumping our tax liability by 5x.

The seller has proposed an entity-level interest sale to preserve the current basis. Our understanding of S.C. Code § 12-37-3150(A)(8) is that we can avoid the ATI trigger as long as the cumulative transfer of ownership interests remains at 50.0% or less within a 25-year window .

I’d love to hear about your experience. Specifically:

  1. How did you handle this low property tax to high property tax situation?

  2. How did you handle the notification requirements for the local assessor?

Thanks in advance for any insights!

2

I do not have any personal experience with this but would talk to a lawyer before considering an entity purchase. I have been warned in the past about doing an entity purchase due to inheriting seller liability. If you do not get a step up in basis, you also will not get a new depreciation schedule. You might try to get the seller to reduce the price rather than take on the liability

3

Seller can create a new entity before the close and sell it. So no liabilities transferred. Right now the dealbreaker is the exorbitant SC state property tax even after considering around 30% entity value is good will.

4

Anyone knows a good lawyer with South Carolina mobile home park experience? Please recommend. Thank you!