Deferred Tax Programs

LAND USE PROGRAM
rural area The North Carolina Legislature enacted a program entitled the "Land Use Program" designed to give relief to specific landowners for property that is being used for the production of agricultural, horticultural or forest products. If property loses its eligibility for any reason, deferred taxes become due for the current year plus three previous years, plus interest for all prior years. If only a part of the qualifying tract loses it's eligibility, a determination shall be made of the amount of the deferred taxes applicable to that part, and that amount shall become payable with interest.

To receive an application for the Land Use Program, call our office at 919-856-5400. The completed application form must be filed with the Revenue Department during the regular listing period, which is the month of January. Applications received after the listing deadline will not be considered for the current year or future years. A new application should be filed the following January.

Agricultural (Farm Use)
Agricultural land means land that is a part of a farm unit actively engaged in the commercial production or growing of crops, plants or animals under a sound management program. Agricultural land includes woodland and wasteland. The requirements for an agricultural deferment are as follows:

May consist of more than one tract of agricultural land, but at least one of the tracts must meet the requirements and each tract must be under a sound management program.
One tract must consist of at least 10 acres that are in actual production and are not included in a farm unit.
Must have produced an average gross income of at least $1,000 for the three years preceding January 1 of the year in which this benefit is claimed. Gross income includes income from the sale of the agricultural products produced from the land and any payments received under a governmental soil conservation or land retirement program.
If individually owned, the property must be the owner's residence or have been owned by the current owner or a relative of the current owner for four years preceding January 1 of the year in which this benefit is claimed.

Forest Land
Forest Land means land that is part of a forest unit that is actively engaged in the commercial growing of trees under a sound management program. Forest Land includes wasteland that is part of the forest unit, but the wasteland included in the unit shall be appraised under the use value schedules as wasteland. The requirements for a Forest Land deferment are as follows:

May consist of more than one tract of Forest Land, but at least one of the tracts must meet the requirements and each tract must be under a sound management program.
One tract must consist of at least 20 acres that are in actual production and are not included in a farm unit.
If individually owned, the property must be the owner's residence or have been owned by the current owner or a relative of the current owner for four years preceding January 1 of the year in which the benefit is claimed.

Horticultural
Horticultural land means land that is a part of a horticultural unit that is actively engaged in the commercial production or growing of fruits or vegetables or nursery or floral products under a sound management program. Horticultural land includes woodland and wasteland that is a part of the horticultural unit, but the land included in the unit shall be appraised under the use value schedules as woodland or wasteland. The requirements for a horticultural deferment are as follows:

May consist of more than one tract of horticultural land, but at least one of the tracts must meet the requirements and each tract must be under a sound management program.
One tract must consist of at least 5 acres that are in actual production.
Must have produced an average gross income of at least $1,000 for the three years preceding January 1 of the year in which this benefit is claimed. Gross income includes income from the sale of the horticultural products produced from the land and any payments received under a governmental soil conservation or land retirement program.
If individually owned, the property must be the owner's residence or have been owned by the current owner or a relative of the current owner for four years preceding January 1 of the year in which the benefit is claimed.

HISTORICAL BUILDING PROGRAM
Real property designated as a historic structure or site by a local ordinance adopted pursuant to G.S. 160A-399.4 or designated as a historic landmark by a local ordinance adopted pursuant to G.S. 160A-400.5 is designated a special class of property under authority of Article V, Section 2(2) of the North Carolina Constitution. Property so classified shall be taxed uniformly as a class in each local taxing unit on the basis of fifty percent (50%) of the true value of the property as determined pursuant to G.S. 105-285 and 105-286, or 105-287. After property has been designated as historical property, the owner is required to submit a completed historical deferment application with the Revenue Department.

The deferred taxes will not become due unless or until the property loses its eligibility for the benefit of this classification. This could occur because of a change in an ordinance designation or a change in the property which causes it's historical significance to be lost or substantially impaired.

BUILDER'S INVENTORY PROGRAM
Beginning January 1, 2010, North Carolina General Statute (NCGS) 105-277.1D allows application by a builder to defer taxes on the improvement portion of the total value of an unoccupied residence for which a Certificate of Occupancy has been issued. The land on which the home sits is not eligible for this program and will be taxed as usual.

Deferred taxes on the residence are a lien on the real property as provided in NCGS 105-355(a) and are due and payable in accordance with NCGS 105-277.1F when the property loses eligibility because of a disqualifying event. Disqualifying events include:

· when the builder transfers the residence
· when the residence is occupied by the builder or by someone other than the builder with the builder’s consent
· five years from the time the improved property was first subject to being listed for taxation by the builder
· three years from the time the improved property first received the property tax benefit

For the purpose of this tax relief program, a “builder” means a taxpayer licensed as a general contractor under NCGS 87-1 who is engaged in the business of buying, improving, and reselling real property. A “residence” is an improvement, other than remodeling, renovating, rehabilitating, or refinishing, by a builder to real property that is intended to be sold and used as an individual’s residence that is unoccupied, and for which a Certificate of Occupancy authorized by law has been issued.

An application for this program should be filed during the regular listing period, which is from January 1 through January 31 each year. Late applications may be considered for good cause through December 31 in the calendar year in which the untimely application is filed. An owner claiming tax relief under NCGS 105-277.1D must file an application for the deferment annually during the listing period.

To request an application for the Builder’s Inventory Deferment Program, please call the Wake County Revenue Department at 919-856-5400 after January 1 of the tax year for which the application is being made.