Watchdog Report – June 17, 2025

Hello REALTORS®,

The SC General Assembly wrapped up the main part of their work at the end of May by completing our state government’s annual budget.  Governor also completed his portion of the budget process by vetoing just $10,000 and as well as a few “directions” to state agencies on how to spend money that was allocated to them.  Congress also has worked on an annual budget, the first in many years.  For the last 25 years, Congress has primarily funded the federal government with a series of continuing resolutions that extend earlier budgets with an increase for inflation. 

Meanwhile, several thousand Realtors traveled to Washington DC to meet with members of Congress about the REALTORS® Advocacy Agenda. 

About the SC Legislative Session

2025 was the first half of a two-year legislative session.  The legislative session begins on the second Tuesday in January and ends on the second Thursday of May of each year.  The session was extended so legislators could return to consider a final draft of the budget, which is routine.  What wasn’t routine was the relatively minor budget vetoes by Governor McMaster. 

In the past, Governors have vetoed a much greater amount of money and in one case, former Governor Mark Sanford vetoed the entire budget.  However, those vetoes have primarily rejected “earmarks,” or one-time allocations of money, but the House and Senate agreed not to include any earmarks.  As I have previously reported, our cities and counties have already been wrestling with tight budgets.  We are watching local budgets for attempts to find new sources of revenue at the expense of the real estate industry.

This means the General Assembly is done for the year.  From time-to-time, specific committees will hold meetings and all other legislation introduced this year, that has not passed, can be considered in next year’s session. 

What Happened During the 2025 Legislative Session?

Your Association of REALTORS® has several issues on its advocacy agenda this year.  One bill passed already.  We also monitored and lobbied other bills.  It’s important to note that some of our most important advocacy wins are the ones that don’t pass (and that we sometimes don’t talk about).

• Continuing Education Requirements for Nonresident Licensees (H.3947)—ENACTED.  This bill allows nonresident brokers and associates licensed in other states to receive credit for continuing education they receive in other states.  It also helps facilitate reciprocal continuing education credits for South Carolina brokers and associates who hold licenses in other states.  Governor Henry McMaster signed the bill into law on May 8.

• PE Septic Soil Evaluations (H.3950)— Passed the House. This bill allows licensed Professional Engineers with additional training and certification to perform soil evaluations on conventional septic systems.  The bill has been referred to the Senate Labor, Commerce, and Industry Committee, which is expected to consider the legislation in the second half of the legislative session in 2026.

• Domestic Violence in Rental Properties (H.3569)—Passed the House.  The bill allows protected tenants to terminate a lease, without penalty, in certain circumstances.  The Senate Judiciary Committee gave the bill its favorable recommendation.  The full Senate will consider the bill next.

• Property Tax Assessment Ratios (H.3841)—Passed the House.  The bill allows an owner-occupied property to continue to be assessed at the 4% assessment ratio until the end of the calendar year after the owner’s estate has been settled.  The bill has been referred to the Senate Finance Committee.

• Unlawful Occupants of Property (Squatters) (H.3387)—Passed the House.  The bill will make it easier for property owners to remove squatters from their property.  The bill has been referred to the Senate Judiciary Committee.

• Small Business Regulatory Freedom Act (H.3021)—Passed the House.  The bill will reduce regulatory burdens by requiring a 25% reduction in total regulations, prohibiting agencies from enacting new regulations without explicit statutory authority, and mandating that for every new regulation, two existing rules must be eliminated. The bill also introduces periodic reviews, automatic expiration dates for regulations, and assessment reports for proposed rules. The bill has been referred to the Senate Judiciary Committee.

• HOA Foreclosures (H.3447)—Passed the House.  The bill protects consumers by providing reasonable notice requirements, and a court hearing, before a HOA can foreclose. The bill has been assigned to the Senate Judiciary Committee.  Additional HOA reform is also part of the REALTOR® Advocacy Agenda.

• Low Income Housing Tax Credits (LIHTC) (S.125)—Passed the Senate.  The bill provides a property tax exemption for nonprofit housing corporations based on economic ownership percentages and requires certification/rent records to be submitted to the Department of Revenue every year to verify eligibility for the credit. The bill has been assigned to the House Ways and Means Committee.

Protecting the rights of property owners with short-term rentals, and prohibiting local government from banning rental of private property to short-term guests, also are part of the REALTOR® Advocacy Agenda.  Two bills have been introduced: H.3861 and S.442.

A lot of work went into getting the SC REALTOR® Advocacy Agenda to this point.  The SCR Advocacy Team, led by Lindsay Jackson Hutto and Austin Smallwood, worked hard for you this legislative session to get these results, but they still have work to do as they continue to discuss these bills with legislators in the next several months.

Realtors Go to Washington

Thousands of Realtors were in Washington DC, June 2-4 to meet with our members of Congress, including about a dozen from the Western Upstate.  This is what they met with them about:

Building Housing Supply and Opportunity

• More Homes on the Market Act (H.R. 1340), which decreases the tax penalties when homeowners sell their homes.
• Housing Supply Framework Act (H.R. 2840/S. 1299), which creates a national strategy for increasing new housing production, primarily by reducing financial and regulatory barriers.
• Revitalizing Downtowns and Main Streets Act (H.R. 2410), which incentivizes the conversion of underused commercial properties into residential and mixed-use housing.
• Uplifting First-Time Homebuyers Act (H.R. 3526), which increases the amount that can be withdrawn penalty-free from an IRA and used for a down payment on a first home.  The bill proposes to increase the amount from $10,000 to $50,000.
• Fair and Equal Housing Act (not yet introduced), which affirms Supreme Court rulings that sexual orientation and gender identity are protected classes under the Fair Housing Act, ensuring equal housing protections for all Americans.

Support Self-Employed Professionals (like Realtors)

• Association Health Plans Act (H.R. 2528/S. 1847), which provides REALTORS® with access to quality, affordable health care.
• Direct Seller and Real Estate Agent Harmonization Act (not yet introduced), which ensures that real estate agents maintain their independent contractor status under the Fair Labor Standards Act.  The Department of Labor has tried to reduce these protections for Realtors in the past.
• Main Street Tax Certainty Act (H.R. 703/S .213), which preserves the 20% deduction for pass-through business income.

FEDERAL BUDGET

The US House passed a budget framework at the end of May, which is now being considered by the Senate.  The Federal budget process is complex compared to the SC General Assembly’s process.  The House and Senate must first agree on a budget framework.  Then the various committees, along with the budget writing committee, finalized individual budget bills.  Once those bills are enacted, a separate committee must “appropriate” the money before it can be spent.  Yes, it’s complex, and Congress is in the early stages of the process.  The current budget, which has been extended for almost a decade, will expire September 30, 2025.

These are NAR’s top five fiscal priorities for the Federal budget, all of which were in the House bill:

1. Qualified Business Income Deduction (Section 199A) will be permanently increased from 20% to 23%.  90% of Realtor members are independent contractors or small business owners who will benefit from this change.
2. Increase the State and Local Tax Deduction (SALT).  The SALT tax cap is proposed to increase from $10,000 to $40,000 for households earning under $500,000.  As home prices increase, the current cap is increasingly a problem for South Carolina taxpayers.
3. Individual Tax Rate reduction in the 2017 Tax Cut and Jobs Act (TCJA) is set to expire at the end of 2025.  The bill makes the current tax rates permanent.
4. Mortgage Interest Deduction (MID) is preserved and made permanent.  The current deduction was reduced in the TCJA.
5. Business SALT and 1031 Like-Kind Exchanges, which are often erroneously called a tax loophole, are both protected in the current tax bill.

Support RPAC

RPAC is an important element of your Realtors Association’s advocacy program.  I encourage you to support RPAC, and we make it easy to do so—we include a voluntary RPAC contribution on your annual dues renewal.  Simply pay it and you have support RPAC.  If you want to do more that modest amount, that’s easy too. 

Michael Dey, Director of Government Affairs