Bill
SB 109
Expands NC disabled-veteran homestead tax exclusion to cover VA grant-funded home adaptations and adds prequalification before home purchase.
Status & Key Dates
- Bill number: SB 109 (Veterans Appreciation Act)
- Introduced: January 23, 2025
- Status (as provided): Passed first reading
- Effective for property taxes: applies to taxable years beginning on or after July 1, 2025
Purpose
- To expand and clarify the disabled‑veteran homestead property‑tax exclusion by (1) allowing exclusion of increases in a home’s appraised value that are attributable to disability‑related adaptations paid for with U.S. Department of Veterans Affairs (VA) housing grants, and (2) enabling disabled veterans to prequalify in advance for the exclusion (even before owning a residence) to aid lenders and buyers.
Key provisions
- Existing exclusion retained: the first $45,000 of the appraised value of a qualifying permanent residence remains excluded from taxation for qualifying disabled veterans.
- New targeted exclusion: the statute now explicitly adds to that exclusion “any portion of the appraised value of the residence attributable to adaptations for the qualifying owner’s medical needs” where those adaptations were funded by a VA housing grant for service‑connected disabilities.
- Prequalification mechanism:
- Disabled veterans may apply for prequalification for the tax relief even if they do not yet own a permanent residence.
- Prequalification is intended to help taxpayers and lenders determine, before purchasing, whether the property will be eligible so exempted amounts can be considered in mortgage/payment calculations.
- Applications for prequalification may be filed at any time on a Department‑approved form; county assessors must make forms available and must notify applicants of qualification within 30 days.
- A veteran who obtained prequalification must still file the regular exclusion application after purchasing the residence.
- Application timing for claiming the exclusion: applications should be filed during the regular listing period but may be filed and must be accepted up through June 1 preceding the tax year in which the exclusion is claimed.
- Eligibility documentation: applicants must establish eligibility (e.g., veteran disability certification or evidence of benefits under 38 U.S.C. § 2101); a prequalification notice may be used in lieu of those materials when applicable.
Who is affected
- Primary beneficiaries: disabled veterans with service‑connected disabilities who receive VA housing grants for home adaptations and who own/occupy a permanent residence in North Carolina.
- Secondary impacts: local county tax assessors (administration of applications and prequalification), lenders and homebuyers (better ability to factor exclusions into lending decisions), and local property tax revenue streams (potential reduction to taxable base for qualifying properties).
Potential fiscal/administrative impact
- Local property tax revenues: could decline modestly in jurisdictions with qualifying veterans whose residence appraised values increase because of VA‑funded adaptations; overall state fiscal impact is not specified in the bill text.
- Administrative: counties must provide prequalification forms and process notices within 30 days; assessors will implement the new prequalification and acceptance rules.
How it changes current law
- Clarifies and expands the scope of the disabled‑veteran homestead exclusion to include VA grant‑funded adaptive work as an excludable component of appraised value.
- Creates an explicit prequalification pathway to establish eligibility in advance of residence purchase.
For readers
- Disabled veterans who expect to use VA housing grants for adaptive work should consider prequalifying with their county assessor before buying a home so the exclusion can be factored into mortgage and tax planning. Local assessors and lenders should review procedures and forms once the bill is enacted and effective.
Compiled from official sources — confirm details with the bill’s official record.
Sign in to ask a question.
