A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "ACCESSORY DWELLING UNIT AFFORDABLE HOUSING INCENTIVE ACT" BY AMENDING SECTION 12-37-220, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO PROVIDE A PROPERTY TAX EXEMPTION FOR CERTAIN ACCESSORY DWELLING UNITS.
Summary
H3469 creates the "Accessory Dwelling Unit Affordable Housing Incentive Act" and amends South Carolina’s property tax exemption statute to exempt the value of certain accessory dwelling units (ADUs) from property tax. An ADU is defined as a secondary housing unit on the same lot as a primary residence. The bill is designed as an affordable housing incentive: homeowners must meet income limits, rent the ADU to a tenant earning 80% or less of area median income, comply with local zoning rules, keep the unit affordable for at least 10 years, and accept Section 8 assistance as part of the rent.
To receive and keep the exemption, a homeowner must provide annual proof of compliance, including lease information, rent documentation, and tenant income records. The bill also addresses what happens if the property is sold during the 10-year period: the exemption can transfer to a new owner who continues the lease, but if the lease is not continued, the ADU’s value is added back to the property at closing and taxes are due. If the owner falls out of compliance, the ADU can be reassessed retroactively and any tax benefits received must be repaid. The act would take effect upon gubernatorial approval and apply to property tax years beginning after 2024.
Impact
The bill would amend Section 12-37-220 of the South Carolina Code, which governs property tax exemptions, by adding a new exemption for the value of qualifying ADUs. It would create a new tax incentive tied to affordable housing production and preservation, while also imposing administrative reporting and enforcement requirements on homeowners and local tax authorities. The measure would affect property owners who build or rent ADUs, tenants who qualify under the income limits, and county assessors responsible for verifying compliance and adjusting tax assessments.
Sentiment
Because no committee transcripts or recorded votes are available, there is no direct evidence of legislative debate or formal support/opposition in the provided materials. Based on the bill text alone, the measure appears to be framed positively as an affordable housing incentive and tax relief tool. Its structure suggests an intent to encourage ADU development while ensuring the units remain affordable and available to lower-income renters.
Contention
The main points of potential contention are the bill’s eligibility and compliance conditions. Homeowners must earn less than 250% of county AMI, rent to tenants at or below 80% of AMI, accept Section 8, and maintain affordability for 10 years, which may be seen as burdensome by some property owners. The annual documentation requirement, retroactive reassessment authority, repayment obligations, and tax collection at closing on sale could also raise concerns about administrative complexity and enforcement. Supporters would likely emphasize the affordable housing benefits, while critics may focus on the restrictions, paperwork, and financial risk associated with noncompliance.