Exemptions and Exclusions

Elderly / Disabled Homestead Exclusion
NC GS 105-277.1

If approved, the exclusion amount is the greater of $25,000, or 50% of the assessed value of the home and up to one acre of land. An owner who receives an exclusion under this section may not receive other property tax relief.

Requirements:

• Must be a North Carolina resident.
• Must be 65 years or older OR totally and permanently disabled as of January 1 of application year.
• Own or occupy a permanent residence on or before January 1 of application year.
• Annual income cannot exceed $33,800.

Documentation showing the applicants income is required upon submission of the application. Applicants who are married and are living with their spouse must provide the income from both spouses, even if the property is not listed in both of their names.

What is counted as income for the program?

Removal of Exclusion because of Sale or Death
If the sale of your residence or death occurs between January 1 and  July 1 of the current year, the exclusion will be removed for the current year. If the sale of your residence or death occurs on or after July 1 of the current year, the exclusion will remain for the current tax year, but removed as of January 1 of the following year.

Temporary Absence
A qualified owner does not lose the benefit of this exclusion because of a temporary absence from their permanent residence for reasons of health or because of an extended absence while confined to a rest home or nursing facility, as long as the residence is unoccupied or occupied by the owner’s spouse or other dependent.

Application for Property Tax Relief AV-9
Application for Property Tax Relief Instructions

Certification of Disability AV-9

Disabled Veterans Exclusion
NC GS 105-277.1C

The exclusion provides a discount up to $45,000 of the assessed value from permanent residence property taxes. An owner who receives an exclusion under this section may not receive other property tax relief.

Requirements:

• Must be a North Carolina Resident.
• Veteran who as of January 1 has a permanent total service-connected disability.
• Permanent residence owned and occupied by an honorably discharged veteran OR unmarried surviving spouse of an honorably discharged veteran.
• Must provide veteran’s disability certification from VA or other federal agency OR present evidence of benefits received for specially adapted housing under 38 USC 2101.

NO AGE LIMITATION OR INCOME REQUIRED

Application for Property Tax Relief AV-9
Application for Property Tax Relief Instructions

Certification for Disabled Veteran NCDVA-9

Circuit Breaker Exclusion
NC GS 105-277.1B

Requirements:

• Must be a North Carolina resident.
• Must be at least 65 years of age or totally and permanently disabled as of January 1 of application year.
• Own and occupy property as a permanent resident for 5 years.
• Annual income cannot exceed $50,700.
• When a permanent residence is owned and occupied by two or more persons other than husband and wife, every owner must meet the qualifications and elect to defer the taxes under the program.

Annual application is required. Deadline to submit application is June 1.

Deferred Tax Information
Taxes over the limitation are considered deferred taxes, which are a lien on the property. If the property is removed or disqualified from the program, the last three years of deferred taxes preceding the current tax year become due and payable with interest as if they had been payable on the original due date.

Disqualifying Events

• Death of owner.
• Transfer of the property.
• Owner ceases to use property as a permanent residence.

Exception to Disqualifying Events

• Death is not a disqualifying event IF ownership passes to a co-owner or spouse.
• Transfer is a not disqualifying event IF title passes to a co-owner, or to a spouse as a result of a divorce proceeding.

Application for Property Tax Relief AV-9
Application for Property Tax Relief Instructions

Real Estate Exemptions & Exclusions

Types of Real Property that could qualify as being tax exempt:

• Religious
• Educational
• Charitable
• Burial
• Brownfield
• Builders Exclusion
• Historic

A single application is required unless a change occurs in ownership/name or use of the property. Properties granted exemption are reviewed every four (4) years to ensure the property still qualifies.

Exempt Real Property Defined:  G.S. 105-278.3(a) Buildings, the land they actually occupy, and additional adjacent land REASONABLY necessary for the convenient use of any such building shall be exempt from taxation if wholly owned by a qualifying agency.

Property Use Guidelines: Each property being applied for must be wholly and exclusively used for either a religious, charitable, educational, or scientific purpose. An exempt status is not automatically applied to a property based on ownership.

Property Tax Exemption/Exclusion AV-10

Religious Exemption
NC GS 105-278.3  

• Property must have a religious purpose that pertains to practicing, teaching, and setting forth a religion. (Worship)
• Religious Ownership must be one of the following agencies:
  A congregation, parish, mission, or similar local unit of church or religious body. A conference, association, presbytery, diocese, district, synod or similar unit comprising local units of a church or religious body.
• Exemptions may be granted for residences of clergy, rabbis, priests or nuns assigned to or serving a qualifying owner.
• Exemptions may be granted for residences that provide guardian, janitorial, and custodial services for such a property.
• Parking for the religious organization can be granted exemption.

Charitable Exemption
NC GS 105-278.5  

• Property must have a charitable purpose that has humane and philanthropic objectives. It is an activity that benefits humanity or a significant rather than limited segment of the community without expectation of pecuniary profit or reward. The humane treatment of animals is also a charitable purpose.
• Charitable Ownership must be one of the following agencies:
  YMCA, or similar organization, home for the aged, sick or infirmed, an orphanage or similar home, SPCA, reformatory or correctional institution, monastery, convent, or nunnery, a nonprofit life-saving, first aid or rescue squad organization, a nonprofit corporation providing housing for individuals or families with low income. 

Educational, Scientific, and Literary Exemption
NC GS 105-278.7  

• Property must have an Educational Purpose. An educational purpose is one that has as its objective the education or instruction of human beings: it comprehends the transmission of information and the training or development of the knowledge or skills of individual persons.
• Property must have a scientific purpose. A scientific purpose is one that yields knowledge systematically through research, experimentation or other work done in one or more of the natural sciences.
• Property must have a literary purpose. A literary purpose is one that pertains to letters or literature (including drama), especially writings, publishing, and the study of literature.
• Educational, Scientific, or Literary Ownership must be one of the following: charitable, historical, scientific, or literary association or institution. A veterans' organization or association. A benevolent association or institution or a nonprofit community or neighborhood organization.

Ownership

• If the property is owned by a taxable entity as of January 1, the property will remain taxable the entire year regardless of change of ownership.
• If the property is exempt as of January 1 and sold to another qualifying tax exempt entity, the new owner has sixty (60) days from the date of the property transfer to apply for the exemption in order for the property to remain exempt.
• If a tax exempt entity sells property to a taxable entity BEFORE July 1st, the property will be taxed the entire year
• If a tax exempt entity sells property to a taxable entity AFTER July 1st, the property will remain tax exempt for the current tax year but become taxable as of January 1 of the following year.

Brownfield Exclusion
NC GS 105-277.13

What is a Brownfield site?
An abandoned, idled or underused property where the threat of environmental contamination has hindered its redevelopment. Common examples would be laundry sites contaminated by the improper disposal of dry-cleaning solvents, or service stations and auto salvage yards which are contaminated by petroleum products.

An active Brownfield Agreement must be filed with the NC Department of Environmental Quality and the Register of Deeds within the respective counties where the property resides.
A Brownfield Agreement specifies:

• what has contaminated the property.
• what structures (improvements) can be built.
• any necessary actions needed to rehabilitate the property for the intended use.
  
  

Improvements must be 100% complete as of January 1 of the application year.
A copy of the Brownfield Agreement is required with the submission of the application.

• If application is approved, the owner will receive an exclusion of assessed value as shown by the table above for five (5) years, beginning with the year the application is made.
• Even if the ownership changes within the five (5) year time frame, the exclusion remains.
• Once the exclusion has been applied to an improvement, it cannot be excluded again following the expiration of the original agreement.

Property Tax Exemption/Exclusion AV-10 

Builders Inventory Exclusion
NC GS 105-277.02

Residential:

• Real property intended to be sold and used as an individual’s residence immediately after construction of dwelling (this excludes property occupied by a tenant or used for commercial purposes, such as model homes).
• Exclusion ends when the property is sold OR after 3 years from the application year.

Commercial:

• Real property that is intended to be sold or used for commercial purposes immediately after improvement is completed.
• Exclusion ends when the property is sold OR after 5 years from the application year.

Single application is required

Builders Exclusion Application - AV-65

Present Use Value Assessment Program
NC GS 105-277.3

Present Use Value (PUV) is designed to allow operating farm and forestry properties to operate without the full burden of property taxes. Instead of the qualifying properties being taxed upon their fair market value, the land in actual production will be taxed upon a reduced rate per acre.

• Horticulture is the growing of fruits, vegetables, nursery, or floral production.
• Agriculture is the production of livestock, crops, and animals.
• Forestry is the commercial growing of trees to harvest timber.

All requirements must be met accordingly for the classification being applied for. NO EXCEPTIONS.

If accepted into the program, periodic audits will be conducted to ensure requirements are still being met to remain in the program.

Exception to Ownership Requirement

If land was assessed at the PUV rate at the time of transfer of ownership, the new owners have sixty (60) days to submit an application for continued-use. By filing a continued use application, the new owner agrees to continue the production from previous owner and assume all liability of deferred taxes if property were to be removed from the program.

Deferred Taxes

If property becomes ineligible or is removed from the PUV program, deferred taxes will become due and payable. The difference between taxes on the fair market value and the taxes that have already been paid will be billed for the current year plus three prior years with interest. 

PUV Application - AV5