|North Carolina offers three property tax relief programs for the permanent residence of qualified homeowners. A permanent residence includes the dwelling, the dwelling site (up to one acre), and related improvements.|
- Elderly or Disabled Exclusion: Applicants must be 65 years of age or totally and permanently disabled. In addition, the total income for 2016 for both an applicant and spouse cannot exceed $29,500. For unmarried joint property owners, each owner must apply separately and benefit limitations may apply based on the percent of ownership.
- Circuit Breaker Tax Deferment Program: Applicants must be 65 years of age or totally and permanently disabled. The total income for 2016 for both an applicant and spouse cannot exceed $44,250. For unmarried joint property owners, each owner must apply and qualify separately. In addition, all owners must have owned and occupied the residence for the previous five years.
- Disabled Veteran Exclusion: Veterans discharged under honorable conditions or their unmarried surviving spouse may be eligible for a reduction in property tax. There is no age or income limitation on this program.
Examples showing how the programs can affect varying income and tax value conditions are displayed at the bottom of this page.
Separate applications are required for each owner that is claiming property tax relief. If a husband and wife are the sole owners of the property, only one application is required. Each owner may receive benefits from only one of these programs even though they may meet the requirements for more than one.
To request an application for tax relief, please call our office at 919-856-5400. The deadline to submit an application is June 1. Late applications may be considered for good cause through the last day of the calendar year in which the tax is levied. A late application for exclusion or deferment received after the calendar year ends will not be accepted and cannot be considered for approval or denial for any reason or circumstance.
Determination of good cause is made on a case-by-case basis, taking into account all pertinent facts and circumstances. Upon a showing of verifiable good cause by the applicant, an application for exemption or exclusion filed after the due date may be considered by the board of county commissioners.
Examples of good cause may include:
- Physical or mental illness, infirmity or disability that would reasonably affect the taxpayer’s ability to apply timely
- Death of the taxpayer or an immediate family member
- Active duty military deployment
Taxpayer neglect, oversight or lack of awareness regarding due dates will not constitute good cause for a late exemption or exclusion application. The burden of proving both verifiable good cause for the late application and eligibility for the requested exemption or exclusion lies with the taxpayer.
Elderly or Disabled Exclusion – NC General Statute 105-277.1
This program excludes from taxation the first $25,000 or 50% (whichever is greater) of assessed value for the permanent residence. Exclusion means some of the value will not be considered when your tax bill is created. If you do not qualify for the program in future years, the excluded value from prior years does not become taxable.
Once approved for the Elderly or Disabled Exclusion, you do not need to reapply unless your permanent residence has changed, your income now exceeds the current annual income eligibility limit, or you are no longer totally and permanently disabled. If the person receiving the exclusion last year was deceased prior to January 1, the person required by law to list the property must notify the Wake County Revenue Department. The surviving spouse or joint property owner is required to reapply for the exclusion if qualified. Failure to make any of these notices before June 1 will result in penalties, interest, and the possible loss of the exclusion.
Circuit Breaker Tax Deferment Program – NC General Statute 105-277.1B
Under this program, taxes for each year are limited to a percentage of the owner’s income. Taxes above the limitation amount are deferred, which means delayed until a future date. The last three years of deferred taxes become payable with interest if a disqualifying event occurs. Disqualifying events include death of the owner or transfer of the property where the owner’s share is not passed to another qualifying owner, and failure to use the property as the owner’s permanent residence.
For an owner whose 2016 income does not exceed $29,500, the owner’s taxes will be limited to 4% of their income. For an owner whose 2016 income exceeds $29,500 but does not exceed $44,250, the owner’s taxes will be limited to 5% of their income. Participation in this program requires all owners to apply and qualify. You must file an application for the Circuit Breaker Tax Deferment Program each year!
Disabled Veteran Exclusion – NC General Statute 105-277.1C
This program excludes up to the first $45,000 of the appraised value of the permanent residence of a veteran discharged under honorable conditions who has a total and permanent disability that is service-connected or who receives benefits for specially adapted housing under 38 U.S.C. 2101. Unmarried joint property owners must apply separately and benefit limitations may apply based on the percent of ownership. If eligible, each owner may receive benefits under either the Elderly or Disabled Exclusion or the Disabled Veteran Exclusion. Once approved for the Disabled Veteran Exclusion, you do not need to reapply unless your disability or benefit status has changed.
COMPARING THE TAX RELIEF PROGRAMS
The comparison situations below are for a married couple, both over 65 years old, that have owned and lived in their residence for at least five full years. The income stated is the combined total for both applicant and spouse. The home is located in Raleigh and the combined tax rate for Wake County and Raleigh is 1.0188 per each $100 of assessed value.
The examples provide results for incomes of both $24,000 and $35,000 with home values of both $175,000 and $375,000.
* Tax limit for deferment is based on 4% of income. ** Tax limit for deferment is based on 5% of income.The figures shown above are for comparison purposes only. Your individual property value and jurisdictional tax rates will apply.