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"Thoughts from our Leader:" 2024 Recap: The Growing Impact of Tax Credits on Real Estate Development in South Carolina

As we wrap up another successful year, it's clear that tax credits are becoming an essential tool for driving real estate development across South Carolina. At Tax Credit Marketplace (TCM), we’ve witnessed firsthand how state and federal credits can unlock significant financial opportunities for developers, investors, and the communities around them.

On December 31, 2024, we closed our 2024 South Carolina Tax Credit Fund, ending yet another landmark year: $45 million in income tax credits, a 44% increase from the previous year. This jump reflects a growing trend in the state’s commercial real estate sector, where tax credits are continuing to breathe new life into projects.

Our 2024 Fund included over 170 investors and supported 24 rehabilitation projects spread across seven counties in the state, including major cities like Greenville, Spartanburg, Charleston, and Columbia and less densely populated areas like Oconee, Cherokee, and Aiken. From historic buildings to new mixed-use developments, these projects have not only revitalized local communities but have also attracted more than $216 million in total development costs.

The Power of Tax Credits in Real Estate

So, what exactly makes these tax credits so valuable? For developers, they offer a way to monetize their projects in a way that boosts cash flow and reduces the financial burden of development. Through our state fund, developers can monetize tax credits generated from their qualifying projects, whether it's for restoring historic sites, rehabilitating abandoned buildings, or constructing new multi- or single-family housing or office spaces. In return, investors can subscribe to these available credits to offset their state tax liability, creating a win-win situation for everyone involved.

The process is straightforward. Our annual fund invests in these real estate projects by purchasing a limited ownership interest. This gives the fund—and our investors—a portion of the tax credits generated by the projects. Those credits, in turn, reduce state tax liability for investors while providing much-needed liquidity for developers. The diversity of our fund’s investments allows our investors’ capital to be deployed in transformative redevelopment projects all over South Carolina.

We work closely with our developer partners to ensure they maximize the value of the available tax credits. We assist in structuring the projects to meet all necessary requirements to comply with state and federal regulations, which is key in ensuring the maximum number of credits are generated.

This partnership benefits everyone involved- developers, investors, and the communities they’re investing in.

Diverse Projects with Significant Impact

Our 2024 Fund invested in projects in a range of asset classes, including hospitality, industrial, retail, student housing, and more. In addition to the state tax credits, our team also placed $7.6 million in Federal Historic tax credits and over $80,000 in Angel Investor credits, further diversifying our financial landscape.

But, for us, it’s not just about the numbers—it’s about the impact these projects have on the local economy and community. From creating catalyst anchors in transitional areas to preserving the rich history of South Carolina, our investments are transforming communities and driving long-term economic growth.

What’s Ahead

We’re excited about the continued momentum behind tax credit investments in South Carolina. The demand from developers is stronger than ever, and investor interest is growing alongside it. Add to that the ongoing job growth and positive migration trends in the state, and it’s clear that the future holds even bigger opportunities.

At TCM, we’re committed to helping our partners navigate this exciting landscape, and we’re already forecasting larger funds in the upcoming years.