Understanding North Carolina Property Taxes
February 20th, 2024
Understanding North Carolina Property Taxes
Are you a resident or new resident of North Carolina and are wondering how property taxes work in North Carolina? Keep reading to understand North Carolina property taxes.
Are you intersted in moving to North Carolina? North Carolina is a great place to live; this state has everything from the beach to the beautiful mountains. Residents here love the low cost of living, dynamic cities, and high quality of life that the state has to offer.
North Carolina is one of the top states to live in. Growing dramatically, this state is full of beauty, fun, and history and has something for everyone. There are many pros and cons to living in NC; one thing many residents enjoy is there is no state property tax in North Carolina.
When it comes down to owning a property in NC, understanding the property taxes is very important for homeowners. Unlike other states, each county has the autonomy to manage and collect property taxes. The North Carolina Department of Revenue supervises everything to ensure uniformity and fairness throughout the state.
So, if you are looking for a home in North Carolina and are interested in how the state of North Carolina collects property taxes and everything that goes into it, keep reading to learn more about property taxes throughout the state to help you have a better understanding.
Here is what you should know about North Carolina property taxes.
Chapters
1. About NC Property Tax System
The property tax in North Carolina is a locally assessed tax collected by the counties. The North Carolina Department of Revenue does not send or collect property tax bills. For most areas, the property tax lien date is January 1st.
Any person owning a property as of January 1st is liable for property taxes in the county where that property is located. There are some exceptions; keep reading to learn more about them.
Navigating the tax system can be challenging and different, but one main key takeaway is that each county stands as the principal architect, determining valuations and collections. The N.C. Department of Revune they are not there to bill or collect; however, it supervises the overall taxation across the state to ensure consistency and fairness throughout.
Since North Carolina does not have a statewide tax, the local taxing authorities decide the rates depending on the budget that they need for that fiscal year. Since this state has 100 counties, the tax rates will vary widely. All taxes are based on property assessed value.
- Most expensive county - Edgecombe - median tax bill $1,061
- Least expensive county - Watauga - median tax bill $1,033
2. Understanding Your Property Tax Bill
The amount of North Carolina property tax that an owner must pay is determined by the property's assessed value and the county's tax rate. Each county does everything differently, so make sure you research your specific county to get the exact information you need to know.
Below are some things you should know in general when you get your property tax bill.
- Personal Value: This is the value of the personal property (machines, equipment, furniture, fixtures, boats, signs used by businesses, etc.)
- Real Value: Value of the real property (land and buildings)
- Elderly Exemption: Some residents may qualify for tax relief through the exemption. Each county differs, so make sure you look at your specific county
- Deferred Value: North Carolina allows eligible producers to apply for value deferment on the basis of present use rather than total market value but must meet statutory requirements.
- Taxable Value: This is the value of property determined by the Assessor using mass appraisal methods prescribed by the NC General Statute. This can include real and personal property (including land) minus any deferments or exemptions.
3. How Property Taxes are Calculated in NC
The annual property tax paid by each owner is calculated using their assessed value and the local tax rate levied by the county. Exemption amounts are removed from the value before the calculation is made. Usually, tax rates are expressed as mills (meaning the dollars per 1,000 of the home value appointed by the county).
Calculating North Carolina property tax involved multiple steps and considerations. To help understand the process each county takes, here is a step-by-step process.
- Determine the assessed value of the property. This is determined by the local tax assessor based on the property's appraised value
- Find the tax rate for your specific county. Each has its unique tax rate.
- Multiply the assessed value by the tax rate to calculate the annual property tax bill.
- Take into account any exemptions or deductions that may lower the tax bill.
- Pay the property tax bill in full or in installments, depending on the local regulations.
The assessed value for a property is the estimation of the property's market value, taking into consideration factors such as location, size, condition, and recent sales of similar properties. The local government determines the assessed value for taxation purposes.
4. Property Tax Exemptions
In North Carolina, there are various exemptions available for property owners that will lessen their property tax burden. To determine if you qualify for any of these exemptions, contact your local tax assessor's office or consult with the NC Department of Revenue for more information.
Keep in mind there may be other local or temporary exemptions available, so always check with authorities to get the most accurate and up-to-date information. Taking advantage of these exemptions and seeking advice is different and varies based on your specific situation.
Homestead Exemption
Suppose you have lived in North Carolina for at least two years and use the property as your primary residence. In that case, you may be eligible for a partial expansion worth $35,000 from your property's taxable value.
Senior Citizen Exemption
Homeowners who have lived in the same North Carolina property for at least five years and have limited income can apply for an exemption of up to $20,000. This deferment program also applies to some over 65s
Veterans Exemption
If a veteran has a disability that is 100% service-related, they may be eligible for a $45,000 exemption on their home value assessment for tax purposes. This is also based on the level of disability.
Conservation Easement Exemption
Property owners who place their land under a conservation easement to protect natural resources or historic sites may also be eligible for tax exemption.
5. Types of Property Taxed
Property taxes are paid by the party that owned the property as of January 1, that tax year. Even if the property transfers ownership on January 2, the office still holds the owner responsible for paying. Expect to receive your tax bill during July; they are due September 1 but can be paid as late as January 6.
There are three main elements of the property tax system in North Carolina. Below are all three, what they consist of, and what you should know about them.
Real Property
This consists of land and buildings. The Machinery Act (G.S 105-286) provides the framework for the listing, assessing, and appraising of both real and personal property. All counties are required to conduct a reappraisal at least every eight years. The assessor may increase or decrease the appraised value of a real property based on multiple factors to be aware of.
Personal Property
Personal property consists of tangible personal property for all personal property that is not intangible and is not permanently affixed to real property. All taxable personal property in NC is appraised at its true value in money. The two examples are inventories owned by manufacturers, retailers, wholesalers, and contractors, as well as non-business personal property.
Personal property is appraised each year as of January 1 at its true value of money. The owner should list the property with the correct county during the listing period. The county assessor may grant extensions for this upon a timely request.
Motor Vehicles
Motor vehicles, if registered, are assessed according to their registration renewal date. The North Carolina General Assembly passed a law to create a combined motor vehicle registration renewal and property tax collection system so that the new law transfers the responsibility for motor vehicle tax collection from the individual counties across NC to the NCDMW.
North Carolina's new Tag and Tax Together system has been designed as a convenient way to pay annual vehicle tag renewals and vehicle property taxes by combining them in one bill.
Methodology
We used information and data from different sources as well as our own data to create this guide to help understand the North Carolina property taxes. There were various data to use, so we put them together to help you understand the property taxes and what goes into the taxation.
- North Carolina Department of Revenue
- North Carolina General Assembly
- N.C. Division of Motor Vehicles
- Davie County Property Taxes
Above are a few sources that we used to gather most of our information about North Carolina property taxes.
FAQS
How do property taxes work in North Carolina?
The property tax in North Carolina is a locally assessed tax collected by the counties. The NC Department of Revenue does not send or collect the taxes, but they oversee to make sure each county is fair. In most areas, the tax lien date is January 1st.
What is the formula for calculating annual property taxes in North Carolina?
Calculating the taxes is determined by the local tax assessment based on the property's appraised value. Find the tax rate for the specific county since each county has its own unique tax rate. Multiply the assessed value by the tax rate, and that will give you the annual property tax bill.
At what age do you stop paying property taxes in North Carolina?
In North Carolina, you have to be at least 65 or totally or permanelty disabled to stop paying property taxes. There are other exemptions, too.
Understanding North Carolina Property Taxes - The Bottom Line
Understanding property taxes is crucial for homeowners in North Carolina. Unlike some other states, property taxes in NC are managed and collected by each county individually. However, the North Carolina Department of Revenue oversees the process to ensure fairness and uniformity throughout the state.
Navigating the tax system may seem challenging at first, but it's important to remember that each county determines valuations and collections on its own. The Department of Revenue is not involved in billing or collecting taxes but rather supervises the overall taxation process to ensure consistency and fairness throughout the state.
Thanks to North Carolina's relatively low property tax rates and accessible online resources, compliance with tax regulations and procedures is both manageable and user-friendly. Understanding and managing your taxes plays a large role in financial planning and helps owners overall for a successful financial future.
If you are considering moving or selling, contact us or visit our website. Our team at Raleigh Realty is here to help you with any home buying or selling needs.
Ryan Fitzgerald
Hi there! Nice to 'meet' you and thanks for visiting our Raleigh Real Estate Blog! My name is Ryan Fitzgerald, and I'm a REALTOR® in Raleigh-Durham, NC, the owner of Raleigh Realty. I work alongside some of the best Realtors in Raleigh. You can find more of my real estate content on Forbes, Wall Street Journal, U.S. News and more. Realtor Magazine named me a top 30 under 30 Realtor in the country (it was a long time ago haha). Any way, that's enough about me. I'd love to learn more about you if you'd like to connect with me on Facebook and Instagram or connect with our team at Raleigh Realty. Looking forward to connecting!
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