On May 19, 2026, the Governor signed S. 853 into law, enacting the temporary processing freeze on certain Exemption Statute applications discussed below.

Key Points

  • This is the second late-session bill affecting the nonprofit housing property tax exemption. As covered in our May 12, 2026, client alert, H. 5006 was amended on the Senate floor to rewrite the exemption under S.C. Code § 12-37-220(B)(11)(e) (the “Exemption Statute”) on a proportionate-ownership basis. S. 853 is a separate vehicle. It has now passed both chambers of the South Carolina General Assembly and is being enrolled for ratification, and a House floor amendment adopted on May 13, 2026, added a new Section 5 that temporarily freezes final approval of certain Exemption Statute applications.
  • The freeze would suspend final approval of applications filed on or after June 30, 2026. Once the act is approved by the Governor, the South Carolina Department of Revenue (“SCDOR”) may not grant final approval of any Exemption Statute application filed on or after that date for property tax years 2026 and 2027. Affected applications would be held in abeyance rather than denied, and would be evaluated upon expiration of the freeze under the law then in effect.
  • A carve-out preserves normal processing for wholly nonprofit-owned property. Applications concerning property owned entirely by a nonprofit housing corporation, either directly or through a wholly owned instrumentality, are not subject to the freeze. Applications concerning property held through a joint venture or other structure in which the nonprofit is not the sole owner would not qualify for the carve-out.
  • Applications filed before June 30, 2026, are not affected. Projects relying on the Exemption Statute that record their deeds and file before that date would avoid the freeze entirely.
  • The freeze would expire June 30, 2027. Filing the SCDOR exemption application before June 30, 2026 is the operative deadline for any project that cannot satisfy the sole-ownership carve-out.

To read more, check out the Moore & VanAllen Client Alert.