Taxation – Real Property – Assessable Transfer of Interest Exemption – Timing

When an assessable (i.e., appraisal-triggering) transfer of interest in real property occurs, our property tax statutes provide for an exemption based on (1) the property’s fair market value at its last assessable transfer of interest (ATI) and (2) the property’s current fair market value as reflected on the books of the property tax assessor for the current property tax year. Given the timing of the property tax system, a proper reading of the ATI exemption statute does not require a property purchaser to claim the ATI exemption the very first tax year after the purchase.

We affirm the ruling of the Administrative Law Court.

All taxpayers are liable for property taxes based on the property they own as of December 31 of the preceding year. See S.C. Code Ann. § 12-37-610. The tax bills for a given year do not go out until September of that year. S.C. Code Ann. § 12-45-70(A). The bills for the “current” tax year are not due until the following January.

A person who buys property after January has until at least January 31 of the following year to claim the ATI exemption. By that time, however, the law envisions the property will have been reappraised.

Here, the taxpayers made assessable property purchases in November and December 2012, respectively. Both taxpayers were going to be statutorily liable for the 2013 property taxes because they owned the property as of December 31, 2012. We do not know whether the reappraisal process would occur by the end of 2012, but we doubt it. Neither taxpayer would receive their first tax bill until September of 2013. That bill would be due in January of 2014.

The appellant-assessor contends that even by the receipt of the first tax bill in September of 2013, the taxpayers already lost the ability to claim the ATI exemption because they did not do so by the previous January, almost immediately after both sales occurred. We believe a construction that bars taxpayers in this situation from claiming the exemption would create a disorderly process rather than an orderly one. We cannot conceive of a reason why one set of purchasers—those who purchase property early in the year—would be afforded two tax years to claim the ATI exemption—those who purchase later in the year—would have not even a year (here, less than two months) to make the same election.

Therefore, we agree that the taxpayers were not required to claim the ATI exemption in January 2013 and could do so in January 2014.

However, the taxpayers contended our interpretation of the statute would allow property owners to claim the ATI exemption several years, or even decades, after the assessable transfer of interest occurs. We disagree.

Section 12-43-217(A) mandates that the county or state reassess property every five years and explains “the county or State shall implement the program and assess all property on the newly appraised values.” Allowing the ATI exemption to override an appraised value set in the five-year reassessment scheme would defeat the legislature’s intent of providing counties with a uniform mechanism of reappraising properties to determine their fair market values and assessing taxes accordingly.

Affirmed.

Fairfield Waverly, LLC v. Dorchester County Assessor (Lawyers Weekly No. 011-065-20, 8 pp.) (Blake Hewitt, J.) Appealed from the Administrative Law Court (S. Phillip Lenski, ALJ) Andrew Shepherd and John Frampton for appellant; Burnet Rhett Maybank and James Peter Rourke for respondents. S.C. App.