USA – SOUTH CAROLINA Law and Practice Contributed by: Matt Norton and Christian Kolic, K&L Gates
be required to indemnify the seller against liabili - ties relating to such contamination. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law Purchasers of South Carolina real estate may either verify directly with the appropriate local zoning authorities the zoning classification of the property or obtain a property zoning report from a third-party supplier. Zoning ordinances and maps are publicly available, and the property’s zoning classification and the resulting permitted uses and restrictions can be directly determined. For appropriate projects, most local authorities will enter into development agreements to facili - tate development of property deemed desirable by the local authorities. Development agree - ments may modify or supersede existing zoning provisions and facilitate development in accord - ance with the peculiarities of the specific project. 2.9 Condemnation, Expropriation or Compulsory Purchase Condemnation is permitted in South Carolina, and it may be exercised by states, counties, municipalities and utilities. Property may be taken only for true “public uses” , such as roads, airports, ports and utility facilities; condemnation for the benefit of private enterprise or general redevelopment is not permitted. 2.10 Taxes Applicable to a Transaction South Carolina imposes a transfer tax on real property conveyances. The amount of the tax is USD1.85 for each USD500, or fractional part thereof, of the value of the property transferred. The calculation of the value of the property transferred, however, is fairly technical and dic - tated by statute; the value is sometimes (but not always) based on the consideration paid.
The transfer tax is also subject to a number of technical exceptions, and it is sometimes pos - sible to structure the transaction so as to avoid the imposition of the transfer tax entirely. The transfer tax applies only to transfers con - veyed by way of a deed, and it generally does not apply to economic changes in ownership resulting from equity transfers by the title-holding entity. Some local jurisdictions, however, require that notice of an equity transfer be given to the local taxing authorities; this notice may trigger a reassessment of the value of the property in the year following the equity transfer, resulting in an increase in annual taxation. 2.11 Legal Restrictions on Foreign Investors Foreign investors should be aware of certain laws that affect real estate investors. Under the Foreign Investment in Real Property Tax Act, up to 15% of the proceeds from the sale of real property by a foreign seller may be required to be withheld and applied to the seller’s federal income tax liability. A purchaser of agricultural land may be required to make a filing under the Agriculture Foreign Investment Disclosure Act of 1978. If the foreign purchaser conducts a US business enterprise in connection with the property, a fil - ing with the US Bureau of Economic Analysis, an agency of the US Department of Commerce, may be required. The purchase of property located near critical infrastructure or sensitive government facilities may require approval from the Committee on Foreign Investment in the United States. Under South Carolina law, a sin - gle foreign purchaser may not own more than 500,000 acres of land in the state.
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