North Carolina Property Tax Relief Programs

Every homeowner knows that they have to pay property taxes on the real estate they own.  But did you know that North Carolina offers certain homeowners property tax relief?  It’s true!  If you qualify, this could mean significant savings on your property taxes.  The North Carolina Property Tax Relief Programs are not automatic, you must apply— and applications are due on June 1st of the applicable tax year. 

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The amount you pay in property taxes is calculated by multiplying the current tax rate by the appraised value of the property.  The appraised value is based on the tax office’s assessment of the property.  The property tax relief programs allow a certain amount of the appraised value to be exempted from tax for those homeowners who are disabled veterans or their surviving spouses or homeowners with a low income and are either over the age of 65, or are totally and permanently disabled.  Alternatively, elderly or disabled homeowners who don’t quite meet the income requirement may be able to defer part of their property taxes, meaning they can pay them at a later date (for example, when they sell their home pass away).

To be eligible for any of these property tax relief programs, you must be a permanent resident of North Carolina and you must legally own and occupy your residence as of January 1 of the year for which the exclusion is claimed.  Each of the 3 programs has additional requirements and unique benefits:

Elderly or Disabled Property Tax Homestead Exclusion (N.C.G.S. § 105-277.1)

  • You must be 65 years old OR be totally and permanently disabled
    • Disabled applicants will have to provide proof of their disability in the form of a certificate from an NC licensed physician or governmental agency authorized to determine qualification for disability benefits
  • Your total annual income from all sources must not exceed the income eligibility limit (for 2015, this amount is $29,000)
    • You must include all sources of income you (and your spouse, if married) received for the previous income tax year—including but not limited to rents, alimony, dividends, disability, pensions, etc. 
  • If you qualify, you can receive an exclusion of $25,000 or 50% (whichever isgreater) of the taxable value of your residence.

Disabled Veteran Property Tax Homestead Exclusion (N.C.G.S. § 105-277.1C)

  • You must be a disabled veteran or the surviving spouse of a disabled veteran who has not remarried
    • To qualify, you must be a veteran of any branch of the U.S. Armed Forces who was honorably discharged and meet one of the following requirements:
  • You have received certification by the VA that you have a service-connected, permanent and total disability;
  • You receive benefits for specially adapted housing under 38 U.S.C. § 2101; or
  • You are the spouse of a deceased veteran whose death was the result of a service-connected condition.
  • If you qualify, the first $45,000 of appraised value of your residence is excluded from taxation.

Property Tax Homestead Circuit Breaker (N.C.G.S. § 105-277.1B)

  • You must be 65 years old OR be totally and permanently disabled
  • Your total annual income from all sources must not exceed 150% of the income eligibility limit (for 2015, this amount is $43,500).  So, if you don’t quite qualify for the Homestead Exclusion above, you may qualify for this program as an alternative.
  • You must legally own and have occupied your residence for at least 5 yearsprior to January 1.
  • If you qualify, you can defer a portion of the property taxes.  Those deferred taxes become a lien on the property and the most recent three years of deferred taxes become due with interest at the time of a disqualifying event.  Disqualifying events are: transferring the residence to someone who is not already a co-owner of the residence or a spouse; the death of the ownerunless the owners share passes to a co-owner or spouse who continues to occupy the property; or the owner ceases to use the property as a permanent residence.

If you have questions about eligibility, benefits, or how to apply for any of the property tax relief programs, you can contact your local county tax administration office or one of the attorneys at Hutchens Law Firm.