HB 950 — Elderly/Disabled Property Tax Modifications (North Carolina) — Summary
Status & Timeline
- Introduced / Filed: November 12, 2024 (prefiled Dec. 17, 2024 in some records).
- Passed First Reading: April 14, 2025. Referred to Finance (if favorable), then Rules.
- Effective date (as drafted): for taxes imposed for taxable years beginning on or after July 1, 2026.
Purpose / Intent
HB 950 would change the state’s property tax homestead exclusion for qualifying elderly or permanently disabled homeowners. The stated goals are to (1) raise the age threshold for elderly eligibility, (2) eliminate the program’s income eligibility limit, and (3) increase the exclusion so that a residence’s full (100%) appraised value may be excluded from taxation (subject to the greater-of formula).
Key provisions (as described in bill materials)
- Eligibility age: raises the minimum age for the “elderly” category from 65 to 70 (the disabled eligibility remains for those who are totally and permanently disabled).
- Exclusion amount: changes the exclusion amount so it is the greater of $25,000 or 100% of the appraised value of the residence (text replaces prior 50% figure with 100%), effectively allowing a full exemption for qualifying owners.
- Income eligibility: the bill’s synopsis states it “removes the income eligibility limit.” However, the version of the statutory text included with the bill packet continues to display the existing income-eligibility language and the Department of Revenue annual determination process. This indicates a potential drafting/recision discrepancy that may be addressed in committee amendments.
- Conforming change: updates the related “homestead circuit breaker” statute (G.S. 105‑277.1B) to reflect the changes to eligibility/exclusion rules.
- Application timing and other administrative rules: retains the existing application periods and procedural language for filing with county assessors.
Who would be affected
- Directly affected: North Carolina homeowners who are age 70+ or totally/permanently disabled and who own and occupy their residence; they could become eligible for a substantially larger (potentially full) property tax exclusion.
- Indirectly affected: counties, municipalities, school districts and other local taxing units that rely on property tax revenue — these entities would likely see reduced property tax bases and correspondingly lower tax revenues to fund local services unless offset by other measures.
- State agencies: Department of Revenue and county tax assessors would implement eligibility and processing changes; fiscal analysis and administrative guidance would be required.
Fiscal and policy implications
- Revenue impact: expanding eligibility and increasing the exclusion to 100% of appraised value would reduce property tax revenues for local taxing units. The bill packet does not include a statewide fiscal estimate; the magnitude would depend on (a) how many homeowners qualify, (b) whether the income limit is in fact removed, and (c) local tax rates. A Department of Revenue fiscal note would be expected to estimate these effects.
- Administrative implications: county assessors would need to implement revised application/verification procedures. If the income limit is removed, verification burdens would change; if retained, annual income determination procedures continue.
- Constitutional context: the statute continues to treat qualifying homesteads as a special class of property under Article V, Sec. 2(2) of the North Carolina Constitution.
Notes / Caveat
- There is a notable inconsistency between the bill’s descriptive synopsis (which says the income eligibility limit is removed) and the statutory language provided (which still contains the income-eligibility subsection and annual adjustment language). Committees or floor amendments may resolve this drafting discrepancy before final enactment.
