Monday, February 6, 2012

Don't forget the Bailey Bill

For developers doing their first historic rehabilitation tax credit deal in South Carolina, let me fill you in on a valuable piece of advice; make sure you don't sell yourself short on available property tax incentives that may accompany your historic rehab tax credits.  In South Carolina, state law authorizes local tax authorities to adopt, by ordinance, a special assessment for eligible historic rehabilitation properties and low income properties.  This little known incentive is known as the "Bailey Bill" to those who are familiar with it.  It can lock-in the assessed value on the property at its pre-rehab value for up to 20 years.  If you haven't had time to crunch your numbers, you should.  It could save you hundreds of thousands in property taxes over the life of the special assessment period.  The trick is to make sure you get preliminary approval for the Bailey Bill from the local tax authorities before you start construction.  First, verify that the local tax authority (city or county) has adopted the Bailey Bill by ordinance.  If they have, you should follow the ordinance carefully and make sure you have fully complied with their application process.  If they have not adopted the Bailey Bill by ordinance, you can request that they do so before you proceed with your project.  Just make sure you apply before you begin, or as soon thereafter as possible, or you may be out of luck.

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