Bill Would Give Tax Breaks to Beach Home Owners

South Carolina lawmakers appear likely to approve a tax break benefitting the owners of about 470 homes, primarily on barrier islands, who rent out their residences more than two weeks each year.

Supporters say the change is warranted because some people need to rent their homes in order to afford soaring hurricane and flood insurance costs.

"People will go and rent a home inland so that they can rent their (beach) homes for two or three months, so that they can afford to pay the insurance," said bill sponsor Sen. Ray Cleary, R-Georgetown. "It's really an inconvenience for them because it's the only home they have."

The legislation sailed through the Senate and House without a single "no" vote and awaits a final Senate vote, due to a minor House amendment. The bill would resolve a property tax issue that's been litigated up through the court system; the question of how long a homeowner should be allowed to rent their residence before the home is taxed as a commercial property.

Rental properties in South Carolina can pay triple the property tax of an owner-occupied home because rental properties are assessed at a higher rate, and are subject to taxes that fund public school operations.

People can now rent their homes for 14 days without losing their preferential property tax treatment, but the bill awaiting final action would extend that to 72 days - roughly the length of summer vacation.

The state Board of Economic Advisors spoke to county assessors, and estimated that 470 properties would benefit from the tax change, at a cost to local governments of just over $1 million yearly.

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