Revitalization of abandoned building credit

South Carolina offers the Revitalization of Abandoned Building Credit to encourage the rehabilitation, renovation and redevelopment of long-vacant buildings for incomeproducing purposes.

Taxpayers who invest in qualifying properties and meet statutory requirements may be eligible for a tax credit equal to 25% of rehabilitation expenses.

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Eligibility

Eligible buildings

To qualify, a building or structure must meet the statutory definition of an abandoned site.

An eligible site is a building or structure:

  • At least 66% of which has been closed continuously or otherwise nonoperational for at least five years; and
  • Not used immediately preceding the rehabilitation as a single-family residence.

The five-year vacancy requirement is measured from the date the taxpayer files a Notice of Intent to Rehabilitate.

Minimum rehabilitation expenses

To qualify for the credit, the taxpayer must improve, renovate or redevelop the eligible building for income-producing purposes and incur rehabilitation expenses that exceed the applicable threshold based on location.

Minimum investment requirements are:

  • Greater than $250,000 for a building located in the unincorporated area of a county or in a municipality within a county with a population of more than 25,000 people.
  • Greater than $150,000 for a building located in the unincorporated area of a county or in a municipality within a county with a population of at least 1,000 but less than 25,000 people.
  • Greater than $75,000 for a building located in the unincorporated area of a county or in a municipality within a county with a population of less than 1,000 people.
Available options

Available credit options

A qualifying taxpayer may choose between two credit structures.

Income or license tax credit

A taxpayer may claim a credit against income taxes or license taxes equal to 25% of rehabilitation expenses.

Key features include:

  • The credit must be taken in equal installments over three years.
  • Installments begin in the tax year in which the site is placed in service.
  • The credit may offset up to 100% of income or license tax liability.
  • The credit may not exceed $750,000 in any one tax year.
  • Unused credits may be carried forward for up to five years.

To qualify for this option, the taxpayer must file a Notice of Intent to Rehabilitate with the South Carolina Department of Revenue (SCDOR) before receiving building permits.

Real property tax credit

Alternatively, a taxpayer may claim a credit against real property taxes equal to 25% of rehabilitation expenses multiplied by the local taxing ratio of each local taxing entity that has consented to the credit.

Key features include:

  • The credit may offset up to 75% of property taxes.
  • The credit may be claimed for a period of up to eight years.

To receive this credit:

  • The county or municipality in which the building is located must determine that the site and proposed project are eligible.
  • The local governing body must approve the project by majority vote.
  • Approval must occur by public hearing and ordinance.

Under this option, the taxpayer must file a Notice of Intent to Rehabilitate with the county or municipality before incurring rehabilitation expenses.

FAQs

Frequently asked questions

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