Local Tax Policies Impact Rental Sector

tax laws impact rental marketLocal governments are eagerly embracing the rise of renting, Charleston’s Post and Courier reports, because commercial properties such as apartments are taxed at almost triple the rate of owner-occupied homes.

This makes them exceptionally attractive at a time when many local governments are struggling with limited budgets. This is especially true for the public school system, according to the source, which receives no funding from taxes of owner-occupied homes and a substantial amount from rental and other commercial properties.

Because all apartments are taxed as commercial properties, local governments may be inclined to favor them in this regard. Single-family homes and condominiums may be either, depending on their specific status, the paper says.

Property owners or investors interested in purchasing a rental property may wish to examine local laws. While the higher taxes in this case may not be attractive, local governments may be more likely to agree to allow rental conversions because of the circumstances. In this way, local government policies may provide an opportunity. Owners may also wish to hire a property management company to see to the operation of a rental.