Navigating the world of property taxes can be daunting for homeowners, especially if you're new to North Carolina. Property taxes play a crucial role in funding local services and infrastructure, but understanding how they're calculated and what you need to pay can be complex. This guide aims to demystify property taxes in North Carolina, helping you stay informed and prepared.

What Are Property Taxes?

Property taxes are annual taxes levied on real estate by local counties. The revenue from these taxes is used to fund various public services, such as schools, emergency services, and infrastructure maintenance.

How Are Property Taxes Calculated in North Carolina?

In North Carolina, property taxes are Ad Valorem, meaning based on the assessed value of your property. Here’s a step-by-step breakdown of the process:

1. Assessment of Property Value:
• The county tax assessor determines the market value of your property, which is typically done every four years but only required once every eight. This value is based on factors such as the property's size, location, condition, structures, and comparable sales in the area.
2. Determining the Tax Rate:
• Each local government entity sets its own tax rate, also known as the millage rate. This rate is expressed in mills, where one mill equals one-tenth of a cent. For example, a tax rate of 0.75% would be expressed as 75 mills.
3. Calculating the Tax Bill:
• Your property tax bill is calculated by multiplying the assessed value of your property by the combined tax rate. For instance, if your property is assessed at $200,000 and the combined tax rate is 0.75%, your annual property tax would be $1,500.

When Are Property Taxes Due?

Property tax bills are typically mailed out in July, and the payment is due by September 1st of the same year. However, the bill can be paid as late as Jan 5th of the following year without accruing interest. Payments made after this date may incur interest and penalties.

Property Tax Exemptions and Relief Programs

North Carolina offers several property tax relief programs for eligible homeowners, which can reduce your tax burden:

• Homestead Exclusion: Provides a partial property tax exemption for homeowners aged 65 or older, or those who are totally and permanently disabled, with limited income.
• Disabled Veteran Exclusion: Offers a reduction in property taxes for honorably discharged disabled veterans.
• Circuit Breaker Tax Deferment Program: Limits property taxes to a percentage of the homeowner's income for elderly and disabled residents.
• Solar Power Exclusion: According to N.C. Gen. Stat. § 105-275 (section 45), homes with an active "solar energy electric system" can experience an 80% exclusion of appraised value.

Appealing Your Property Assessment

If you believe your property's assessed value is incorrect, you have the right to appeal. Here's how:

1. Informal Appeal: Contact the county assessor's office to discuss your concerns and provide evidence supporting your claim (e.g., recent sales of comparable properties).
2. Formal Appeal: If the informal appeal doesn’t resolve the issue, you can file a formal appeal with the county Board of Equalization and Review. Be prepared to present a compelling case with documentation.
   

Conclusion

Understanding property taxes is essential for all North Carolina homeowners. By knowing how your taxes are calculated, staying informed about exemptions and relief programs, and understanding the appeal process, you can better manage your property tax obligations. If you have any questions or need assistance, don't hesitate to contact your local tax assessor's office or the Umstead And Oak Team.