Wednesday, May 9, 2012
South Carolina Abandoned Buildings Tax Credits
One of the many casualties of the recession was the real estate market, and South Carolina is no exception. It is not uncommon to drive down the street and see derelict structures that once housed families or businesses. Abandoned buildings can wreak havoc on an area, lowering property values and becoming a magnet for unsavory activities and other forms of decay. The city of Florence alone has about 2,500 abandoned or dilapidated structures. It is in the best interest of the state to prevent these buildings from falling into disrepair. South Carolina state legislators agree, which is why they are proposing a new law that would help rescue these abandoned buildings. The law, entitled the “Abandoned Buildings Revitalization Act,” seeks to save these buildings through the strategic use of a tax credit.
There are several requirements that must be fulfilled to be eligible for this tax credit. First, the abandoned building must be revitalized for commercial use. Second, the building must have been abandoned for at least five years. The building will be considered “abandoned” if at least two thirds of its space has been vacant for those five years. Third, the business owner must invest at least $500,000 into the renovations. The taxpayer who revitalizes the site of the abandoned building would be eligible for a 25% state income tax credit. Like other state income tax credits, these credit could be syndicated, or “sold” in essence, to raise capital for the project.
The bill (H4802) was passed by the House of Representative on April __, 2012 by a vote of 108-0. It was co-sponsored by state reps Rick Quinn (R-Lexington) and James Smith (D-Richland). So far, it has received significant bipartisan support with over 30 lawmakers signing onto the bill, and no one has voiced opposition to the bill. The proposed bill has also received the support of the State Fire Fighters Association, Police Chiefs Association, Palmetto Trust for Historic Preservation, the Greater Columbia Chamber of Commerce, and the Affordable Housing Coalition of South Carolina, among others. The bill is now awaiting consideration in the Senate, where it stands a very good chance of becoming law this year.
In addition to saving dilapidated buildings through tax credit incentives, the bill is also expected to create new jobs, further stoking an economy that is still recovering. Steve Wukela, the mayor of Florence, is another ardent supporter of the bill for precisely this reason. “If you can get the marketplace in there to revitalize these properties, it changes the whole complexion of the community, particularly downtown,” Wukela said of the bill’s potential to save his struggling city. This new tax credit, should it make it through the legislature and be signed into law, would provide the incentive necessary for these markets to “get in there and revitalize the properties.”
Source: “Lawmakers propose tax breaks for revitalization efforts,” by Patricia Burkett, published at SCNow.com.
See Our Related Blog Posts:
at 10:01 PM