North Carolina has cheap property taxes when compared to other states. It has a tax rate of 0.77%, which is significantly lower than the national average of 1.07%.
You may be a homeowner thinking “who will buy my house in North Carolina?” or you could be selling a house for cash. If this is the case, you’ll want to know what to expect on your annual property tax bill as well as your property’s tax exemptions.
If you are contemplating purchasing a home in North Carolina, you should think about ways to save money on taxes. While paying property taxes is required in all jurisdictions, certain states have minimal property taxes.
This article will teach you about North Carolina property tax exemptions and how to determine if you are exempt from paying them.
An Overview of North Carolina Property Taxes
Property taxes are entirely determined and obtained by counties in North Carolina. Every North Carolina homeowner is expected to pay property taxes in the county in which their house is located. The Property Tax Division of the North Carolina Department of Revenue is in charge of collecting taxes, which are used to pay government services such as law enforcement, public education, and fire departments.
Property tax rates in North Carolina are quite low when compared to those in other states. Every year, local governments and the state gather a total revenue of $85 billion, with property taxes accounting for 11.7 % of total revenue. Property taxes account for a lesser fraction of overall income collected in a state, which is often reflective of low real estate tax rates.
North Carolina Tax Laws
Taxes are collected using a variety of methods at the federal, state, and municipal levels, including income tax, sales tax, and specific taxes on items such as alcohol and cigarettes.
North Carolina uses tax income to fund state roadways and infrastructure projects, public schools, the court system, regulatory agencies, and other issues that affect the lives of residents. Taxes enable the government to deliver important services and keep the peace.
Consumer Tax Laws in North Carolina
A tax is a monetary levy levied by the government. Tax revenue is typically used to pay for public services. Consumer taxes are one of many different types of taxes. Retail sales taxes, taxes on cigarettes and alcoholic drinks, gasoline taxes, and other taxes on particular items are examples of consumer taxes.
North Carolina has some of the highest liquor tax rates in the U.S., despite having comparatively low consumer tax rates for cigarettes (since tobacco accounts for more than 15% of North Carolina’s agricultural revenue).
Personal Income Taxes in North Carolina
North Carolina’s personal income tax regulations have become relatively simple, with a flat 5.75% rate for all taxpayers beginning with the 2015 tax year. Partnerships are not taxed in North Carolina, as they are in many other states. North Carolina also permits people to file their annual income taxes online (as do most other states).
Fraud Statutes and Tax Evasion in North Carolina
While the Internal Revenue Service (IRS) is well-known for strictly enforcing federal income tax collection, state laws typically include financial incentives (mainly fines and interest).
Tax evasion and fraud in North Carolina are punishable by a fine equivalent to half of the unpaid tax amount. Late payment penalties are less harsh, but they accumulate over time. If it’s a mortgage, you can still get out of the mortgage without penalty.
North Carolina Property Tax Exemptions
Aside from the opportunity to contest your real estate taxes if they are erroneously assessed, North Carolina offers a variety of tax incentives to qualified homeowners. Homestead and elderly exemptions are the most popular. Due to the exemptions, property taxes are not charged as a proportion of your property’s value. Even though you qualify for one of these exemptions, you must still pay your North Carolina property taxes on time.
Homestead Exemption in North Carolina
In the event of bankruptcy, the homestead exemption in North Carolina shields your property equity from creditors. The exemption allows you to exclude at least $35,000 of the home’s worth from the state’s property taxes. You should have resided in the state for at least two years utilizing the house as your permanent residence to be eligible. The exemption shields you from losing your home.
Exemption for Senior Citizens in North Carolina
The senior citizens’ exemption offers qualifying seniors with a limited exemption valued at least $20,000 per year. To be eligible for this exemption, you should be at a minimum of 65 years old and fulfill specific income limits. If you respond “Yes”, you don’t need to complete Form AV-9A Certification of Disability. The state also provides a property tax deferral program that restricts the amount of North Carolina property taxes that qualifying owners can pay.
Exemption for Veterans and Military Spouses in North Carolina
The estimated value of a primary residence occupied and owned by a retired military disabled veteran or the surviving spouse of an honorably discharged handicapped veteran is exempt from property taxes in North Carolina up to $45,000.
Keeping Property Taxes Under Control
When a homeowner’s income is overburdened by property taxes, a circuit breaker tax deferment program exemption kicks in. As of the time of writing, homeowners who earn less than $42,150 per year with their spouse can be eligible for the homestead exemption.
The homeowner must also be a North Carolina resident, have owned the property and lived there for five years, be at least 65 years years of age or totally and permanently incapacitated, and have owned the property for five years. Taxes that are exempt are postponed, and a lien is put on the house. The exemption amount is equivalent to 4% of the property owner’s income.
How to Find Out If You’re Exempt From Property Taxes
To be eligible for any of North Carolina’s homestead exemption schemes, the applicant must be the homeowner. They must have equitable legal title, either alone or together with another owner. A single-family house, a unit in a multi-family residential complex, or a manufactured home can be the subject of the transaction.
If homeowners satisfy specific standards, North Carolina permits them to pay lower property taxes. The main property tax relief programs in North Carolina are summarized here. Also, see North Carolina General Statute 105-277.
- Homestead exclusion for the aged or crippled: If you’re 65 or older, or chronically disabled, you are entitled to a partial exemption worth a minimum of $25,000, with yearly inflation adjustments. However, you are only eligible if your income is below a specific threshold.
- Deferred taxes for the elderly and crippled: A property tax deferral program is available to some North Carolina homeowners. It establishes a cap on how much tax the owners must pay. The tax amount in excess of the maximum is postponed until a disqualifying event occurs, which is usually when the residence is sold. To qualify for this tax relief, you must be 65 or older and permanently and fully handicapped. In addition, you must have lived in the house for at least five calendar years and have an income that is less than a certain threshold.
Although North Carolina statutes establish statewide property tax guidelines, your local government is in charge of tax administration and collection. For more information on how property tax exemptions work in your county, contact your county tax assessor. Inquire about any documents you’ll need to fill out and the date for submitting them.
Explore the North Carolina assessors list maintained by the state’s Department of Revenue to locate contact information for your county tax assessor.
Your tax statement may contain special charges in addition to the property tax based on the assessed value of your house. Typically, they are used to pay for neighborhood-related improvements such as roadway paving or repaving.
The valuation of the property is used to calculate the property tax in North Carolina, and the assessor is obliged to revalue the property at least once every eight years. The reappraisal should assess the current market worth of the property.
Once the assessor establishes the value of your property and the amount of your tax bill, you must pay that amount for eight years until the next revaluation. As a result, it is critical to ensure that the value is correct.
At Tifanny Property Investment, we buy houses in Charlotte and are a straightforward cash house buyer. If you need to sell your property quickly, we are local purchasers who can buy houses without employing an agency.