State law requires local government officials to publish a revenue neutral tax rate as part of the budget process. Revenue neutral is a budget term that means the revenue brought in by property taxes in a revaluation year would be approximately the same as if the revaluation had not taken place, after an adjustment for average annual growth. Local officials are not required to adopt the revenue neutral tax rate when they adopt the property tax rate.
The revenue neutral tax rate does not mean that an individual’s tax bill will not change - it is not property specific.
If Wake County leaders adopt a revenue neutral tax rate, there are three possibilities for how your new property value will impact your County property tax. You need to compare the percent change of your property value to the average % change of the total Wake County tax base (which includes real property, personal property and public utilities). Note, the average % change of the total tax base, adjusted for average annual growth, is estimated at 41.5%.
Municipalities and special districts are also required to publish their respective revenue neutral rates. If those municipal officials adopt revenue neutral rates, your new property value will also impact your municipal and special district property taxes in the same three ways.
Until tax rates are set by elected county and municipal officials, the effect that revaluation will have on specific tax bills cannot be determined. However, it is possible to apply the revenue neutral tax rate to updated assessed values to demonstrate how changes in assessed value, compared to the overall average, could affect property bills.
Wake County has a Revenue Neutral Tax Calculator. This tool can be used to see an estimate of County, municipal or special district taxes for any property in Wake County, based on the new assessed value and revenue neutral tax rates.
Estimates of Wake County taxes, along with fire district taxes where applicable, are provided for all parcels. Revenue neutral rates for municipalities and special tax districts are provided at the discretion of their respective officials. If no estimate is provided, property owners should monitor their jurisdiction’s annual budget process to learn the published revenue neutral rate and determine the potential effect on their tax liability.
More information about the Revenue Neutral Tax Rate and the Revenue Neutral Calculator is available on the Tax Portal.