Are 1031 exchanges still allowed in 2025 for Charleston real estate investors?
Yes, 1031 exchanges are still allowed in 2025. Depending who is in charge of the government, eliminating the benefits of the 1031 exchange seem surface in tax reform discussions from time to time. But for now, the 1031 is safe for Charleston real estate investors. They remain a valuable tool for deferring capital gains taxes when selling an investment property, but the IRS rules are strict and evolving. Working with a knowledgeable advisor like Bill Byrd can help you navigate these requirements successfully.
A Quick Overview of 1031 Exchanges
A 1031 exchange, named after Section 1031 of the Internal Revenue Code, allows you to sell one investment property and reinvest the proceeds into another “like-kind” property of equal or greater value without immediately paying capital gains taxes. For Charleston investors, this can mean preserving more equity to reinvest into the local market or beyond.
The Status of 1031 Exchanges in 2025
Despite political debates and discussions over potential tax reform, the 1031 exchange is still an available in 2025. Investors in Charleston and across the country can continue to use them, but it’s important to stay informed about possible changes in future tax laws.
For now, Charleston investors can confidently plan 1031 exchanges to reposition their portfolios. Whether it’s selling a downtown rental, upgrading to a multi-family property in Mount Pleasant, or moving equity into land on Johns Island, the 1031 exchange is allowed in 2025 and the rules remain in effect.
Why the 1031 Exchange Matters in the Charleston’s Real Estate Market
Charleston’s real estate market has seen consistent appreciation over the past two decades. For example, according to the Charleston Trident Association of REALTORS®, median single-family home prices grew from about $163,800 in 2004 to over $424,000 in 2025. That’s a significant increase that can translate into large taxable gains when selling.
For many local investors, using a 1031 exchange is the difference between keeping that equity working for them or losing a large portion of it to taxes. This is especially critical in areas like the Historic District, James Island, John’s Island, Mount Pleasant and others, where real estate appreciation has been dramatic and investor demand remains strong.
How the Process Works in 2025
The rules and timelines remain the same in 2025. Key steps include:
- Sell your investment property – Once you close, your exchange timeline begins.
- Work with a Qualified Intermediary – Required by the IRS to hold your proceeds.
- Identify replacement properties within 45 days – Follow the 95%, 200% or 3 property rules.
- Close on your new property within 180 days – To fully defer taxes, the replacement must be equal or greater in value.
- File IRS Form 8824 – Your CPA will help report the exchange to the IRS.
Mistakes Charleston Investors Should Avoid
Common pitfalls include:
- Waiting too long to start searching for replacement properties.
- Trying to manage proceeds without a Qualified Intermediary.
- Assuming all property types qualify (primary residences do not).
- Missing a deadline.
Bill Byrd: Your 1031 Exchange Resource in Charleston
Bill Byrd is a Certified Keller Williams Real Estate Planner and has decades of experience helping Charleston investors maximize their real estate strategies. From guiding property owners through 1031 exchanges to teaching real estate professionals across the Carolinas and Virginia, Bill is a trusted voice in the industry.
If you’re unsure how the 1031 rules in 2025 apply to your investment goals, Bill can provide personalized guidance and connect you with qualified tax and legal experts.
Important Professional Note
This article is for educational purposes only. It is not legal, tax, or financial advice. Always consult with a licensed CPA, tax advisor, or attorney before making decisions about a 1031 exchange.
Are You Considering a 1031 Exchange in Charleston?
Yes, 1031 exchanges are still allowed in 2025, and they remain one of the most effective tools for deferring taxes when selling investment property in Charleston. If you want to explore your options, call Bill Byrd at 843-972-7670 to schedule a personalized consultation today.
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The Author…
Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill
