North Carolina HB 1181: Property Tax Modifications.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1181

Short Title: Property Tax Modifications. (Public)
Sponsors: Representatives Cervania and Rubin (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
May 4, 2026
*H1181-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO MODIFY THE INCOME ELIGIBILITY LIMIT FOR THE ELDERLY OR 2
DISABLED PROPERTY TAX HOMESTEAD EXCLUSION FOR MARRIED COUPLES, 3
TO ELIMINATE THE DEFERRED TAX LIABILITY UNDER THE PROPERTY TAX 4
HOMESTEAD CIRCUIT BREAKER, TO EXPAND THE PROPERTY TAX 5
HOMESTEAD CIRCUIT BREAKER BY PROVIDING AN ALTERNATE MEANS TO 6
QUALIFY BASED ON AREA MEDIAN INCOME, TO APPROPRIATE MONEY TO 7
THE NORTH CAROLINA ASSOCIATION OF COUNTY COMMISSIONERS TO 8
ASSIST COUNTIES WITH PROPERTY REAPPRAISALS, AND TO IMPOSE AN 9
EXCISE TAX ON THE TRANSFER OF CONTROLLING INTERESTS IN ENTITIES 10
THAT HOLD AN INTEREST IN REAL PROPERTY. 11
The General Assembly of North Carolina enacts: 12
SECTION 1.(a) G.S. 105-277.1 is amended by adding a new subsection to read: 13
"(a3) Spousal Income Limitation. – Married applicants residing with their spouses may 14
qualify for the property tax homestead exclusion provided in this section if their income does not 15
exceed one hundred fifteen percent (115%) of the income eligibility limit determined under 16
subsection (a2) of this section." 17
SECTION 1.(b) G.S. 105-277.1B reads as rewritten: 18
"§ 105-277.1B. Property tax homestead circuit breaker. 19
(a) Classification. – A permanent residence owned and occupied by a qualifying owner 20
is designated a special class of property under Article V, Section 2(2) of the North Carolina 21
Constitution and is taxable in accordance with this section. 22
(b) Definitions. – The definitions provided in G.S. 105-277.1 apply to this section. 23
(c) Income Eligibility Limit. – The income eligibility limit provided in 24
G.S. 105-277.1(a2) applies to this section. 25
(c1) AMI Limit. – Seventy percent (70%) of the area median income for a household of 26
two persons in the county in which the property is located, as determined by the most recent 27
figure reported by the United States Department of Housing and Urban Development as of 28
January 1 preceding the taxable year for which the benefit is claimed. 29
(d) Qualifying Owner. – For the purpose of qualifying for the property tax homestead 30
circuit breaker under this section, a qualifying owner is an owner who meets all of the following 31
requirements as of January 1 preceding the taxable year for which the benefit is claimed: 32
(1) The owner has an income for the preceding calendar year of not more than 33
one hundred fifty percent (150%) of the income eligibility limit specified 34

General Assembly Of North Carolina Session 2025
Page 2 House Bill 1181-First Edition
maximum amount authorized in subsection (c) subsection (f) or (f1) of this 1
section.section, as applicable. 2
(2) The owner has owned and occupied the property as a permanent residence for 3
at least five consecutive years and has occupied the property as a permanent 4
residence for at least five years.the required amount of time under subsection 5
(f) or (f1) of this section, as applicable. 6
(3) The owner is at least 65 years of age or totally and permanently disabled. 7
(4) The owner is a North Carolina resident. 8
(e) Multiple Owners. – A permanent residence owned and occupied by husband and wife 9
is entitled to the full benefit of the property tax homestead circuit breaker notwithstanding that 10
only one of them meets the length of occupancy and ownership requirements and the age or 11
disability requirement of this section. When a permanent residence is owned and occupied by 12
two or more persons other than husband and wife, no property tax homestead circuit breaker is 13
allowed unless all of the owners qualify and elect to defer taxes under this section.qualify. 14
(f) General Tax Limitation. – A qualifying owner may defer that has owned the property 15
as a permanent residence for at least five consecutive years and has occupied the property as a 16
permanent residence for at least five years is relieved of the portion of the principal amount of 17
tax that is imposed for the current tax year on his or her permanent residence and exceeds the 18
percentage of the qualifying owner's income set out in the table in this subsection. If a permanent 19
residence is subject to tax by more than one taxing unit and the total tax liability exceeds the tax 20
limit imposed by this section, then both the taxes due under this section and the taxes deferred 21
under this section must be apportioned among the taxing units based upon the ratio each taxing 22
unit's tax rate bears to the total tax rate of all units. 23
Income Over Income Up To Percentage 24
-0- Income Eligibility Limit 4.0% 25
Income Eligibility Limit 150% of Income Eligibility Limit 5.0% 26
(f1) Alternate Tax Limit