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Are 1031 Exchanges Still Allowed in 2025?

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Are 1031 exchanges still allowed in 2025 for Charleston real estate investors?

Home under a magnifying glass. Are 1031 exchanges still allowed in 2025?

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

Chart showing real estate prices going up over time.

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:

1031 exchanges are still allowed in Charleston in 2025 but you still have to follow the rules.
  • 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

How does a 1031 exchange work?

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How does a 1031 exchange work when selling property in Charleston, South Carolina?

A 1031 exchange in Charleston allows you to defer capital gains taxes when selling an investment property, as long as you reinvest the proceeds into another qualifying property. The process follows strict IRS timelines and rules, so working with a trusted local real estate wealth advisor like Bill Byrd helps ensure compliance and maximize your financial outcome.

Understanding the Basics of a 1031 Exchange

If you’re considering selling an investment property in Charleston and wondering how a 1031 exchange works, you’re in the right place. The 1031 exchange is a proven strategy for building long-term real estate wealth. The name comes from Section 1031 of the Internal Revenue Code, which allows property owners to defer capital gains taxes by exchanging one “like-kind” investment property for another of equal or greater value.

“Capital Gains Tax is the biggest impediment to growing generational wealth”.

Why Charleston Investors Use 1031 Exchanges

Charleston’s real estate market offers a wide range of investment opportunities—historic homes, waterfront estates, entry-level rental neighborhoods, and even trailer parks throughout the Tri-County area.

As property values have risen steadily over the last two decades, investor activity has also increased. According to the Charleston Trident Association of REALTORS®, the median sales price for a single-family home climbed from $163,800 in 2004 to $424,300 in 2025—a gain of more than 160%.

For local investors, that kind of appreciation often means substantial taxable gains when selling, making a 1031 exchange especially attractive.

Do you know your investment properties current Cap Rate? You may be surprized!

Step-by-Step: How a 1031 Exchange Works in Charleston

Before starting a 1031 exchange, planning is critical. Meeting with Bill Byrd before listing your property can help ensure success. Here’s a simple outline of the five key steps:

  1. Pre-Exchange Planning – Build your team early. This usually includes a Qualified Intermediary, an accountant, a financial planner, and an attorney. Begin searching for possible replacement properties now.
  2. List and Sell Your Investment Property – Once you close on your property, the exchange timelines begin. Step up your search for replacement options. “Like-kind” is broadly defined and can include a downtown rental, a Johns Island tract, or a Mount Pleasant duplex.
  3. Close the Sale of the Relinquished Property – IRS rules require using a Qualified Intermediary to hold your proceeds. From this point, you have 45 days to identify one or more replacement properties under one of three rules: the Three-Property Rule, the 95% Rule, or the 200% Rule.
  4. Identify and Secure Your Replacement Property – You must formally identify your chosen replacement property or properties before the 45th day.
  5. Close on the Replacement Property – The transaction must be completed within 180 days. Your CPA will help file IRS Form 8824 to report the exchange.

Avoiding Common 1031 Exchange Mistakes in Charleston

Investors who don’t fully understand the rules can easily make costly errors. IRS guidelines are strict and must be followed precisely.

  • Missing the 45-day identification or 180-day closing deadlines
  • Failing to use a Qualified Intermediary
  • Trying to exchange a property that doesn’t qualify (such as a primary residence)
  • Closing on your relinquished property before you’ve set up your exchange.
How does a 1031 exchange work? Follow the timeline.

Bill Byrd: Your Charleston 1031 Exchange Resource

Bill Byrd is a Certified Keller Williams Real Estate Planner and has been a trusted advisor for many years to a number of successful real estate investors. With decades of experience in residential, land, and investment real estate, Bill has guided countless clients through complex processes like 1031 exchanges. Whether you’re selling a historic downtown property, acreage on Wadmalaw Island, or a rental properties in North Charleston, Bill provides strategic advice and can connects you with other trusted tax and legal professionals when needed.

In addition to working directly with clients, Bill teaches real estate agents across South Carolina, North Carolina, and Virginia about IRC Section 1031, further demonstrating his expertise and commitment to real estate education.

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. The Code

Ready to Explore a 1031 Exchange in Charleston?

If you’re planning to sell an investment property in Charleston, reach out to Bill Byrd at 843-972-7670. Bill’s deep knowledge of the Charleston real estate market, from Awendaw to Edisto and from the Sea Islands to I-95, Bill can help you make informed decisions that align with your financial goals. Schedule your personalized 1031 consultation today.

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

1180 Sam Rittenberg Blvd Ste. 300 / Charleston, SC 29407 / 843-790-7000