North Carolina

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State of North Carolina Property Taxes

Community Forum for North Carolina


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State Tax Summary
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The state of North Carolina names the real property tax Ad Valorem Tax and the official value standard states that true cash value in money “means the price estimated in terms of money at which the property would change hands between a willing and financially able buyers and a willing seller, neither being under any compulsion to buy or to sell and both have reasonable knowledge of all the uses to which the property is adapted and for which it is capable of being used.” General State statues, as amended.

The property tax is assessed locally and collected at county level. Property tax bills are not mailed and the North Carolina department of revenue does collect the property tax. All property is taxed as of January 1 and taxes are due and payable on January 2. Taxes paid after January 6 are delinquent and may incure late fees. Taxpayers that own property on January 1 are responsible for paying taxes to the county where the property is located. The motor vehicle property tax is billed separately, as of 1993. Motor vehicle taxes do not incur a lien on property. Other personal property, such as airplanes, boats, and motors can be billed with property taxes. The Department of Revenue exercises supervision of the valuation and taxation of property by taxing units in North Carolina. General Statute 105-289. Administration of taxation is the responsibility of the Property Tax Division, a division of the Department of Revenue. The Department of Revenue appraises the value of all public service property and local taxing entities bill and collect the taxes. The state of North Carolina offers a web site that promotes North Carolina and South Carolina property taxes and employment opportunities at www.CarolinaLiving.com 2007 Tax Friendly Places include North Carolina with tax burden of 11% of income, from CNN Money by David Ellis. http://www.dor.state.nc.us/taxes/property/index.html Property tax publications, government reports, property valuations for North Carolina can be found at http://www.dor.state.nc.us/publications/property.html Property owners may appeal the valuation assessed by their county if the assessment is not comparable to similar properties or not comparable to fair market value. There are five levels of appeal available in North Carolina. Personal exemptions are for homeowners, seniors, those with disabilities and veterans. Exemptions include household property, government property, religious property, charitable property, education property, livestock, poultry, pollution abatement equipment, recycling equipment, commercial inventories, non-profit hospitals and non-profit cemeteries. The Philadelphia Area Service Center (ASC) provides tax service for North Carolina.

Responsible agency

  • North Carolina Department of Revenue

Contents

Property tax calendar

  • Assessment date January 1
  • Valuation Notice Date Valuations are mailed after a reassessment is done. Each county tries to reassess every two to four years, but this varies by county.
  • Appeal Deadline 30 days from date of mailing of notice
  • Bill Payment Date Taxes are due on January 5.

If this date falls on a weekend or legal holiday, the date is moved to the next business day. Authorization for discounts is provided and compliance with the statutes require tax collecting authorities to file each year by May 1 with the State Department of Revenue. Local taxing entities may offer discounts if taxes are paid prior to due date. General Statutes of North Carolina, Sec 105-360.

Property tax rates and dates

  • Annual assessment of real propertyYes
  • Classification of property Aassessed at 100%
  • Collections * Taxes are collected one year in arrears
  • Fiscal year uly 1 through June 30.

The collection cycle begins early summer if discounts are offered and ends on January 5 the collection due date.

  • Level of government responsible for assessment ounty
  • Reassessment cycle very 2 or 4 years, varies by county
  • Tax Calculation Rate ssessed Value x Mill Rate = Taxes due

Local Boards of each county establishes the mill rate every year.

Residential Exemptions

Exemption claim applications must be filed to receive exemption from specially treated property. Seniors and disabled persons are eligible for exemptions.

  • Seniors

A program is for seniors aged 65 years or older, for tax relief. The greater of the first $20,000 or 50% of appraised value on a property may be exempt if this is a primary residence and the combined income of property owner and spouse is less than $15,000. The owner must be a North Carolina resident.

  • Disabled

A program is for seniors aged 65 years or older, for tax relief. The first $20,000 of an assessed value on a property may be exempt if this is a primary residence and the combined income of property owner and spouse is less than $15,000. The owner must be a North Carolina resident.

  • Veterans

Deployed military are allowed 90 days after the end of the person’s deployment to pay property tax. Interest will accrue if the taxes are not paid within the 90 day extended period and interest will accrue from date originally due.

Commercial Exemptions

  • Agriculture Personal property tax deferment

Property used for agriculture or forestry usage may be eligible for tax deferment program. North Carolina mandates a lower use value assessment, rather than fair market value, to preserve farmland and the farming industry. Property must be owned for four years preceding January 1 of the tax year. At least one tract must be actively farmed, but there may be multiple tracts of land on the farm. The tax deferred is the difference between the land use value and the fair market value.

  • Three categories of farm use are eligible.
  • Agriculture land of at least ten acres and earning at least $1000 for the preceding three years.
  • Horticulture land must have one tract of at least five acres and have earned at least $1000 in the tree preceding year.
  • Forest land must have at least 20 acres and used for commercial growth of trees, but there are no income requirements.
  • Historic property

Local governments may grant deferment to certain historic properties that are in designated historic landmarks by local ordinance and adopted by the Historical Property Commission. The property used by nonprofit historic entities for preservation purposes may be exempt from tax unless there is a change in the historic designation of the property.

Tax Collector and Officials

North Carolina counties assess and collect taxes. Tax assessors are appointed to a two or four year term, depending on the county. A college degree an, special education and certification are required. The county treasurer is the ex-officio collector in all counties. County Assessors maintain and set property valuations. The County Auditor certifies property valuations. The County Treasurer collects current and delinquent property tax.

Forms

Specific deduction claim forms and tax deferment forms are available from:

  • North Carolina Treasury Department
  • Ad Valorem Tax Division
  • PO Box 25000
  • Raleigh, North Carolina 27640

Forms due dates

Applications for deductions against real property must be filed with an affidavit to the local tax collector in North Carolina by May 1 and must be filled again if the property changes owners. All deductions for real property require that the ownership must be recorded as of January 1of the assessment year for taxes payable the following year.

State assessor's manual

  • Machinery Act of North Carolina
  • State of North Carolina Department of Revenue
  • Property Tax Division
  • PO Box 25000
  • Raleigh, North Carolina 27640
  • Phone (919) 733-7711
  • Price $25.00

How property tax determined

Residential property is assessed at 100% of market value and the assessor determines the fair market value. The assessor may use one of three methods.

  • Cost Approach

At current labor and material prices, estimate how much it would take to replace the property with one similar to it. Use this method when there are no sales of comparable properties.

  • Income Approach

For an apartment or office building, estimate how much income the property can produce.

  • Market Approach

Use other comparable properties that have sold recently, determine the most probable sales price of the subject property.

Appeal Procedure

North Carolina has a property tax appeal manual at http://www.dor.state.nc.us/publications/appeals_manual_2006.pdf

  • First

Try to resolve the problem in an informal meeting with the tax assessor in the local county, after receiving an assessment notice.

  • Second

Next, if not satisfied with the informal meeting, file a formal appeal with the County Board of Equalization and Review.

  • Third

If not satisfied, appeal in writing to the North Carolina Tax Commission.

  • Fourth

If not satisfied, request a hearing before the State Court of Appeals where the property is located.

  • Fifth

All administrative appeals must be exhausted before appeals are made to a judicial review. All current property taxes must be paid before the counts will hear the case. As a last appeal, a taxpayer may appeal to the North Carolina Supreme Court.

Additional tax classifications

  • Agricultural property tax

Agriculture has no separate class or assessed value.

  • Commercial property tax

Commercial and Industrial has no separate class or assessed value.

  • Mobile home property tax

Mobile homes are assessed at 100% and as real property when permanently affixed to the land.

  • Personal property tax

Personal property is Class II and taxed at 100% of assessed value.

  • Utilities tax

Utilities are Class III and taxed at 100% of assessed value.

Additional tax bills and charges

  • Construction Work in Progress

An occupancy tax is imposed in Idaho in lieu of property tax, on all new construction during the construction year . The tax amount is the same as if the structures were on the assessment rolls on January 1, but prorated for portion of the year based on occupancy

  • Corrected bill

When an error is found on the original tax statement or when property owners go before the Board of Review, resulting in tax increases or decreases, a correct bill is issued when the corrections are made. Corrected bills are also issued when levy rates are wrong, the house is on the wrong tax lot and for homeowner exemption.

  • Delinquent taxes

Delinquent balances are applied to subsequent bills. A taxpayer may apply to have late charges, interest and property taxes canceled due to undue hardship or property damaged by a casualty loss event . No notices are sent for delinquent taxes in North Carolina.

  • Duplicate Bill Charge

Charges for duplicate bills vary by county.

  • Penalty and Interest charges

0.75% interest penalty accrues for each month from February 1, and continues to accrue until the amount due is paid. Penalty between January 6 and February 1 varies.

Current Legislation and Pending Issues

References





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