North Carolina SB 159: Elderly Prop. Tax Appreciation Exclusion.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 159

Short Title: Elderly Prop. Tax Appreciation Exclusion. (Public)
Sponsors: Senators Waddell and Chitlik (Primary Sponsors).
Referred to: Rules and Operations of the Senate
February 26, 2025
*S159-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO PROVIDE ADDITIONAL PROPERTY TAX RELIEF TO NORTH CAROLINA 2
RESIDENTS WHO ARE SIXTY-FIVE YEARS OF AGE OR OLDER. 3
The General Assembly of North Carolina enacts: 4
SECTION 1. Article 12 of Subchapter II of Chapter 105 of the General Statutes is 5
amended by adding a new section to read: 6
"§ 105-277.1G. Elderly property tax appreciation exclusion. 7
(a) Classification. – A permanent residence owned and occupied by a qualifying owner 8
is designated a special class of property under Section 2(2) of Article V of the North Carolina 9
Constitution and is taxable in accordance with this section. A permanent residence shall be 10
assessed at the lower of its true value or its qualifying value. 11
(b) Definitions. – The following definitions apply in this section: 12
(1) Owner. – Defined in G.S. 105-277.1. 13
(2) Permanent residence. – Defined in G.S. 105-277.1. 14
(3) Property tax relief. – Defined in G.S. 105-277.1. 15
(4) Qualifying owner. – An owner who meets all of the following requirements 16
as of January 1 preceding the taxable year for which the benefit is claimed: 17
a. The owner is a North Carolina resident. 18
b. The owner has owned the property as a permanent residence for at 19
least five consecutive years and has occupied the property as a 20
permanent residence for at least five years. 21
c. The owner will be at least 65 years of age during a portion of the 22
calendar year. 23
(5) Qualifying value. – The appraised value of a qualifying owner's permanent 24
residence during the first year the owner's application for property tax relief 25
is accepted pursuant to subsection (j) of this section. 26
(c) Tax Limitation. – A qualifying owner may defer the portion of the principal amount 27
of tax that is imposed for the current tax year on any increase in appraised value of the owner's 28
permanent residence over the qualifying value. 29
(d) Multiple Owners. – A permanent residence owned and occupied by husband and wife 30
is entitled to the full benefit of the elderly property tax appreciation exclusion notwithstanding 31
that only one of them meets the length of occupancy and ownership requirements and the age 32
requirement of this section. When a permanent residence is owned and occupied by two or more 33
persons other than husband and wife, no elderly property tax appreciation exclusion is allowed 34
unless all of the owners qualify and elect to defer taxes under this section. 35

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 159-First Edition
(e) Temporary Absence. – An otherwise qualifying owner does not lose the benefit of the 1
elderly property tax appreciation exclusion because of a temporary absence from the permanent 2
residence for reasons of health or because of an extended absence while confined to a rest home 3
or nursing home, so long as the residence is unoccupied or occupied by the owner's spouse or 4
other dependent. 5
(f) Deferred Taxes. – Taxes deferrable under subsection (c) of this section are a lien on 6
the real property of the taxpayer as provided in G.S. 105-355(a) and must be carried forward in 7
the records of each taxing unit as deferred taxes. The three most recent fiscal years of deferred 8
taxes, if any, are due and payable in accordance with G.S. 105-277.1F when the property loses 9
its eligibility for deferral as a result of a disqualifying event described in subsection (g) of this 10
section. On or before September 1 of each year, the collector must send to the mailing address of 11
a residence on which taxes have been deferred a notice stating the amount of deferred taxes and 12
interest that would be due and payable upon the occurrence of a disqualifying event. 13
(g) Disqualifying Events. – Each of the following constitutes a disqualifying event: 14
(1) The owner transfers the residence. Transfer of the residence is not a 15
disqualifying event if (i) the owner transfers the residence to a co-owner of 16
the residence or, as part of a divorce proceeding, to the owner's spouse and (ii) 17
that individual occupies or continues to occupy the property as a permanent 18
residence. 19
(2) The owner dies. Death of the owner is not a disqualifying event if (i) the 20
owner's share passes to a co-owner of the residence or to the owner's spouse 21
and (ii) that individual occupies or continues to occupy the property as a 22
permanent residence. 23
(3) The owner ceases to use the property as a permanent residence. 24
(h) Creditor Limitations. – A mortgagee or trustee that elects to pay any tax deferred by 25
the owner of a residence subject to a mortgage or deed of trust does not acquire a right to foreclose 26
as a result of the election. Except for require