Bill
SB 798
Provides elderly homeowners 65+ relief by capping property tax to the lower of true value or a set qualifying value and deferring increases above that amount.
Key idea
- SB 798 proposes a new property tax relief provision called the "Elderly Property Tax Appreciation Exclusion" for qualifying homeowners aged 65 and older. The goal is to limit increases in property tax on a designated permanent residence when its assessed value rises above a predefined “qualifying value.”
Main purpose
- Provide additional property tax relief to North Carolina residents who are 65 or older and meet ownership/occupancy requirements, by capping the taxable value (and deferring the tax on value increases) of their qualifying residence.
What the bill would do (substantive provisions)
1) New exclusion: § 105-277.1G. Elderly property tax appreciation exclusion
- Classification: A qualifying owner’s permanent residence can be designated as a special class of property. It is taxed at the lower of:
- the property’s true value, or
- its “qualifying value” (the value established in the first year the relief is granted).
- Definitions:
- Owner: as defined in G.S. 105-277.1.
- Permanent residence: as defined in G.S. 105-277.1.
- Qualifying owner: must meet all of the following as of January 1 preceding the tax year:
- North Carolina resident.
- Has owned the property as a permanent residence for at least five consecutive years and has occupied it as a permanent residence for at least five years.
- Will be at least 65 years old during part of the calendar year.
- Qualifying value: the appraised value of the residence during the first year the owner’s application for relief is accepted.
- Tax limitation (c): A qualifying owner may defer the portion of the tax attributable to increases in the appraised value above the qualifying value. This deferral represents a lien on the property and is carried forward in taxing records.
2) Ownership scenarios (d)
- If a husband and wife own and occupy, both receive the benefit even if only one meets occupancy/age requirements.
- If more than two owners (non-spousal), all owners must qualify and elect to defer taxes for the exclusion to apply.
3) Temporary absence (e)
- Qualifying owners do not lose the benefit due to short-term absences (health-related or extended stay in rest home/nursing facility) as long as the residence remains unoccupied or occupied by a spouse/dependent.
4) Deferred taxes mechanics (f)
- Deferred taxes are a lien and must be tracked. The three most recent years of deferred taxes become due if the property loses eligibility due to a disqualifying event.
- Annual notices: By Sept 1 each year, the assessor must notify the owner of the amount of deferred taxes and interest payable upon a disqualifying event.
5) Disqualifying events (g)
- Transfers: Not disqualifying if transferred to a co-owner or spouse and the recipient occupies the property as a permanent residence.
- Death: Not disqualifying if the deceased's share passes to a co-owner or spouse who occupies the property as a permanent residence.
- Ceasing to use as permanent residence: Disqualifying.
- Other specifics address how transfers or deaths affect eligibility.
6) Creditor limitations (h)
- Mortgage lenders paying deferred taxes do not gain the right to foreclose due to election to defer taxes.
- Any mortgage/loan documents cannot prohibit deferral of taxes, beyond what federal law requires.
7) Construction and liens (i)
- The section does not change the attachment of liens for personal property taxes.
8) Application process (j)
- Application window: Filed during the regular listing period or accepted at any time up to and including June 1 before the tax year for which relief is claimed.
- Application method: On a form provided by the assessor (per G.S. 105-282.1).
- Notice: By January 15 preceding the eligible tax year, the county assessor must notify qualifying owners of the relief available under this section.
Related statutory references
- The bill places the elderly exclusion alongside other targeted relief programs (homestead exclusion, circuit breaker, disabled veteran exclusion) as one of the special valuations in G.S. 105-277.1.
- It also designates the elderly exclusion as a special class of property under the State Constitution.
Effective date
- The act would take effect for taxes imposed for taxable years beginning on or after July 1, 2027.
Who is affected
- Qualifying owners of a permanent residence aged 65+ who meet residency, ownership, and occupancy duration requirements.
- Co-owners and spouses may influence eligibility in multi-owner scenarios.
- Tax assessors and local tax collecting entities, due to new filing/notice obligations and deferred tax administration.
Notes on impact
- Potential property tax savings arise from the lowering of assessed value to the lesser of true value or qualifying value and from deferral of increases beyond the qualifying value.
- Deferred taxes create liens and have repayment triggers if eligibility ends or ownership changes in specified ways.
- The program requires careful tracking of qualifying status, value baselines, and deferred tax balances over time.
Effective formatting
- Sectioned by purpose, key provisions, eligibility, mechanics, and timing for clarity.
Compiled from official sources — confirm details with the bill’s official record.
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