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SB 159

Election Laws - As introduced, prohibits using voting machines or voting equipment to cast, receive, or transmit an election ballot via the internet, except for military personnel and citizens abroad. - Amends TCA Title 2, Chapter 6, Part 5 and Title 2, Chapter 9.

114th Regular Session (2025-2026) Introduced by Joey Hensley

SB 159 allows NC homeowners 65+ who meet criteria to defer taxes on increases in home value above a fixed qualifying value, creating a lien until a disqualifying event.

Recommended for passage with amendment/s, refer to Senate Calendar Committee Ayes 7, Nays 1 PNV 1
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Bill Summary · SB 159

Summary — SB 159: Elderly Property Tax Appreciation Exclusion (North Carolina)

Status: Passed 1st Reading (Introduced Jan 23, 2025)
Statutory changes: Adds G.S. 105‑277.1G; amends cross‑references in G.S. 105‑277.1 and G.S. 105‑282.1(a)(2)c.
Effective for taxable years beginning on or after July 1, 2026.

Main purpose

SB 159 creates a new, permanent‑residence property‑tax relief option for North Carolina residents age 65 and older. It allows qualifying elderly homeowners to defer (effectively exclude for the current year) the portion of property tax attributable to any increase in appraised value of their permanent residence above a baseline “qualifying value.” The provision is designated as a special class of property under the State Constitution (Article V, Sec. 2(2)).

Key provisions

  • Creation of the “Elderly property tax appreciation exclusion” (G.S. 105‑277.1G):
    • A qualifying residence is assessed at the lower of true value or the qualifying value.
    • Qualifying value = the appraised value in the first year the owner’s application is accepted.
  • Eligibility (must be met as of January 1 preceding the taxable year claimed):
    • Owner is a North Carolina resident.
    • Owner has owned and occupied the property as a permanent residence for at least five consecutive years.
    • Owner will be at least 65 years old during part of the calendar year.
  • Tax deferral mechanics:
    • The owner may defer the portion of current‑year property tax attributable to any increase in appraised value above the qualifying value.
    • Deferred amounts become a lien on the property (per G.S. 105‑355(a)) and are carried forward in taxing unit records.
    • The three most recent fiscal years of deferred taxes, if any, become due upon a disqualifying event (below).
  • Disqualifying events (and exceptions):
    • Transfer of the residence (except to a co‑owner or to a spouse in divorce if the transferee continues to occupy it).
    • Death of the owner (except if the owner’s share passes to a co‑owner or spouse who continues occupancy).
    • Owner ceases to use the property as a permanent residence.
  • Administrative and notice requirements:
    • Application: filed during regular listing period or anytime up through June 1 preceding the tax year; assessors must accept applications filed by that deadline.
    • Assessors must provide notice to qualifying owners by January 15 preceding the taxable year about the relief.
    • Collectors must send an annual notice (by Sept. 1) to addresses with deferred taxes stating the deferred principal and interest that would be due upon a disqualifying event.
  • Creditor protections:
    • A mortgagee or trustee who elects to pay deferred taxes does not gain foreclosure rights as a result of that election.
    • Contract clauses (mortgages, deeds of trust, etc.) that prohibit owners from deferring taxes under this section are generally void (except where federal law requires otherwise).

Who is affected

  • Primary beneficiaries: North Carolina homeowners age 65+ who have owned and occupied their home as a permanent residence for at least five consecutive years.
  • Secondary effects: county tax assessors and collectors (administration and record‑keeping of deferred tax liens and notices); municipal taxing units (timing of tax receipts may shift).

Administrative / timeline notes

  • Effective for tax years beginning July 1, 2026 — owners may begin filing per the statute’s filing rules for that tax year.
  • Local taxing units must track deferred taxes and comply with the notice and lien‑recording requirements set out in the statute.

Practical effect

SB 159 freezes, for tax‑calculation purposes, the taxable base for eligible elderly homeowners at the qualifying value and defers taxation on subsequent appreciation until a triggering event occurs. The measure reduces immediate property tax liabilities for qualifying seniors but creates deferred tax liens that remain collectible under prescribed conditions.

Compiled from official sources — confirm details with the bill’s official record.

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