Tax Relief and Deferment

All Applications Due on or before June 1st.

PERMANENT RESIDENCE OWNERS THAT CAN QUALIFY:

  • HONORABLY DISCHARGED veteran with a permanent-total disability that is service connected or receives or has received benefits for specially adapted housing under 38 U.S.C.2101
  • UNMARRIED surviving spouse of an honorably discharged veteran that had a permanent total disability that was service-connected or had received benefits for specifically adapted housing under 38 U.S.C.2101
  • EXCLUSION: A permanent residence owned and occupied by an owner who is a NC residence and who is an honorably discharged disabled veteran or the unmarried surviving spouse of an honorably discharged disabled veteran is designated a special class of property . . . The first $45,000 of appraised value of the residence is excluded from taxation
  • An owner who receives this exclusion may not receive other property tax relief. (GS 105-277.1(a))
  • No age requirement
  • No income requirement
  • One-time application required
  • Applications may be timely filed up to and through June 1
  • Untimely applications may be filed until the end of the calendar year and may be approved by the Board of County Commissioners upon showing good cause for failure to timely file the application

HONORABLY DISCHARGED VS. DISCHARGED UNDER HONORABLE CONDITIONS
The disabled veterans exclusion is only for those veterans who have been honorably discharged. The veteran should provide proof by submitting a copy of their honorable discharge certificate or similar evidence.

VETERAN’S DISABILITY CERTIFICATION DEFINED
A certification by the United States Department of Veterans Affairs or another federal agency that a veteran has a permanent, total disability that is service connected. For proof of disability, the veteran should be able to provide one of these letters serving as a veteran’s disability certification:

  • Award Letter – VA letter given to the veteran when disability determination is made.
  • VA response letter to the request from a Veteran for certification.
  • VA MUST USE THE TERMS “PERMANENT & TOTAL”.

Veteran is defined as a veteran of any branch of the Armed Forces of the United States.

Your permanent residence includes your dwelling plus related improvements and up to 1 acre of land. A dwelling can be a single family house, a condo, or a manufactured home.

Your social security number information is mandatory and will be used to establish the identification of the applicant. (42 U.S.C. Section 405 (c)(2)(C)(i)).

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 home, so long as the residence is unoccupied or occupied by the owner’s spouse or other dependent.

The homestead Circuit Breaker is the deferral of property taxes that exceed a tax limitation. This tax deferment program is for NC residents who meet all of the qualifications for the “Homestead Exclusion” plus they have lived in and owned their current residence for AT LEAST FIVE YEARS.

AN ANNUAL APPLICATION IS REQUIRED AND MUST BE FILED ON OR BEFORE JUNE 1st

OWNERSHIP REQUIREMENTS:

  • Must be a North Carolina resident
  • Must be at least 65 years of age or totally and permanently disabled on or before January 1 of the current year
  • Must have owned and occupied a permanent residence for five (5) consecutive years as of January 1 of the current year
  • To qualify for 2016, your 2015 income cannot exceed $44,250

Interest accrues on deferred taxes as if they had been payable on the dates on which they would have originally become due.

Since income can vary from year to year, it is possible that you may qualify one year but not the next, and then requalify in a subsequent year. The Homestead Circuit Breaker requires a new application to be submitted every year.

An annual application for the Circuit Breaker may be timely filed up to and through June 1.

When property is owned by multiply owners (other than husband & wife), every owner must meet the qualifications and elect to defer the taxes under the Circuit Breaker.

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 home so long as the residence is unoccupied or occupied by the owner’s spouse or other dependent.

2015 TAX LIMITATION

  • 2015 Income – $0 to $29,500 – Taxes are limited to 4% of income
  • 2015 Income – $29,500 to $44,250 – Taxes are limited to 5% of income
  • 2015 Income – Over $44,250 – Do not qualify

Examples of income are: Wages, Social Security; Disability, SSI, VA Benefits; pensions; annuities, interest; dividends; IRA distributions; 401K & 457 distributions; Worker’s compensation; alimony; A.F.D.C.; foster care payments; unemployment; rental; business, farm and gambling income; railroad retirement; capital gain, etc.

DISQUALIFYING EVENTS

  • DEATH OF OWNER – exception: property passes to co-owner or spouse
  • TRANSFER OF PROPERTY – exception: transferred to co-owner or spouse (divorce)
  • OWNER CEASES TO USE THE PROPERTY AS PERMANENT RESIDENCE

Upon a disqualifying event, the last three (3) years of deferred taxes plus interest become due and payable. These deferred taxes are a lien on your property.

The qualifications for the Homestead Exclusion are as follows:

  • Applicant must be a North Carolina Resident
  • Applicant must be at least 65 years of age or totally and permanently disabled on or before January 1 of the current year
  • Must own and occupy the permanent residence
  • Their income can not exceed $29,500 for 2015

A person is totally and permanently disabled if the person has a physical or mental impairment that substantially precludes them from obtaining gainful employment and the permanent disability is reasonably certain to continue without improvement through out their life.

Proof of disability must be in the form of a certificate from a physician licensed to practice medicine in North Carolina or from a Government Agency authorized to determine disability.

A disability letter from the Social Security Administration cannot be accepted as proof of disability, unless the letter meets the statutory requirements.

A person’s legal residence is the dwelling, the dwelling site (not to exceed one acre of land) and related improvements. A residence is a house, condo or manufactured home.

PROOF OF INCOME WILL BE REQUIRED

Income consists of ALL money received from every source EXCEPT gifts or inheritances. For married applicants residing with their spouses, the income of both spouses must be included whether or not the property is in both names. All W-2’s or 1099’s must be submitted as proof of income.

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 home so long as the residence is unoccupied or occupied by the owner’s spouse or other dependent.

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’s tax bill.

If the sale of your residence or death occurs after July 1 of the current year, the exclusion will be removed for the following year’s tax bill.

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 application for this exclusion should be filed during the regular listing period (January 1-31), however, it may be filed and accepted at any time up to June 1. If approved, you do not have to file a new application each year. If there are any changes in income, use of the property and/or ownership, a new application must be filed. Periodically a request from our office will be sent for updated income verification. This information will be required to maintain the benefit.

When property is owned by two or more persons and one or more of them qualifies for this exclusion, each owner must apply separately for their share of the exclusion. Husband and wife are on the same application.

Social Security number information is mandatory and will be used to establish the identification of the applicant, {42 U.S.C. Section 405(c)(2)(C)(i)}.

G.S. 105.282.1.

Every owner of property claiming exemption or exclusion from property taxes under the provisions of this Subchapter has the burden of establishing that the property is entitled to it. If the property for which the exemption or exclusion is claimed is appraised by the Department of Revenue, the application shall be filed with the Department. Otherwise, the application shall be filed with the assessor of the county in which the property is situated. An application must contain a complete and accurate statement of the facts that entitle the property to the exemption or exclusion and must indicate the municipality, if any, in which the property is located. Each application filed with the Department of Revenue or an assessor shall be submitted on a form approved by the Department. Application forms shall be made available by the assessor and the Department, as appropriate.

Non-Deferment Exemptions and Exclusions:

  • Veterans organizations
  • Lodges, fraternal and civic purposes
  • Goodwill Industries
  • Brownfields-Attach Brownfields agreement
  • Religious purposes
  • Educational purposes (institutional)
  • Religious educational assemblies
  • Home for the aged, sick, or infirm
  • Low- or moderate-income housing
  • YMCA, SPCA, VFD, orphanage
  • CCRC-Atach Form AV-11
  • Other charitable, educational, etc.
  • Charitable hospital purposes
  • Medical Care Commission bonds

Tax Deferment Programs:

  • Historic district property held as a future site of a historic structure
  • Residence held for sale by general contractor (Attach copy of the certificate of occupancy)
  • Working waterfront property
  • Historic property-Attach copy of the local ordinance designating property as historic property or landmark
  • Nonprofit property held as a future site of low- or moderate-income housing
Tax: 230 Government Center Drive, Suite 190 • Wilmington, NC 28403 • Phone 910-798-7300 • Fax 910-798-7310 • Email taxadmin@nhcgov.com