What is the South Carolina ATI Exemption?

The Assessable Transfer of Interest (ATI) Exemption is a South Carolina property tax relief provision designed to prevent drastic, sudden property tax increases when commercial or investment real estate changes hands. It provides up to a 25% reduction in the property’s taxable fair market value following a qualifying sale or ownership transfer.

Who and what properties qualify for the exemption?

To qualify for the ATI exemption, the property must meet three core requirements:

  • 6% Assessment Ratio: The property must be taxed at the 6% rate (e.g., commercial properties, second homes, vacation rentals, or non-owner-occupied real estate) both before and after the purchase.
  • Ownership Transfer: The property must have undergone a qualifying Assessable Transfer of Interest (sale or deed transfer).
  • Increased Taxable Value: The purchase price (new ATI fair market value) must exceed the county’s previous assessed fair market value.

(Note: Owner-occupied primary residences taxed at the 4% rate, agricultural lands, and properties assessed by the SC Department of Revenue do not qualify).

How is the tax discount calculated?

The ATI exemption reduces the new purchase value by 25%. However, the new taxable value cannot drop lower than the property’s prior fair market value on the county tax books.

Example:

  • Previous Assessed Value: $800,000
  • New Purchase Price: $1,200,000
  • 25% Reduction: $1,200,000 x 0.75 = $900,000
  • New Taxable Value: $900,000 (since $900,000 is greater than the prior $800,000 baseline). The owner saves taxes on $300,000 of value.

When is the deadline to apply?

The property owner (or their legal representative) must file the ATI Exemption Application with the local County Assessor’s office on or before January 31st of the calendar year following the transfer.

How long does the tax discount last?

Once granted, the exemption applies for the tax year following the sale and remains in place for up to five tax years (or until the property undergoes another transfer or changes to a 4% primary residence).