North Carolina HB 261: Displaced Residential Land Tax Deferral.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2017
H 1
HOUSE BILL 261

Short Title: Displaced Residential Land Tax Deferral. (Public)
Sponsors: Representatives Millis, Howard, and Warren (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: State and Local Government II, if favorable, Finance
March 8, 2017
*H261-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO CREATE A PROPERTY TAX DEFERRAL PROGRAM FOR PERMANENT 2
RESIDENCES THAT ARE SUBSEQUENTLY REZONED FOR NONRESIDENTIAL 3
USES. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. Article 12 of Subchapter II of Chapter 105 of the General Statutes is 6
amended by adding a new section to read: 7
"§ 105-277.15B. Taxation of displaced residential land. 8
(a) Classification. – Displaced residential land is designated a special class of property 9
under Section 2(2) of Article V of the North Carolina Constitution and must be appraised, 10
assessed, and taxed in accordance with this section. For purposes of this section, "displaced 11
residential land" means a person's legal residence, including the dwelling, the dwelling site, and 12
related improvements. The dwelling may be a single-family residence, a unit in a multifamily 13
residential complex, or a manufactured home. 14
(b) Requirements. – Property qualifies as displaced residential land if it meets the 15
following requirements: 16
(1) The dwelling site was not zoned for a particular use or was zoned for residential 17
use. 18
(2) Prior to the time the dwelling site was zoned or during the time the dwelling 19
site was zoned for residential use, a permanent residence was constructed on the 20
dwelling site. 21
(3) The dwelling site was zoned after construction of the permanent residence for a 22
use other than residential use. 23
(4) The owner of the dwelling site was the owner at the time of the zoning for a use 24
other than residential use. 25
(c) Deferred Taxes. – An owner may defer a portion of tax imposed on displaced 26
residential land that represents the sum of the difference between the true value of the displaced 27
residential land as it is currently zoned and the value of the displaced residential land as if it were 28
zoned for residential use. 29
The difference between the taxes due under this section and the taxes that would have been 30
payable in the absence of this section is a lien on the displaced residential land as provided in 31
G.S. 105-355(a). The difference in taxes for the three fiscal years preceding the current tax year 32
shall be carried forward in the records of each taxing unit as deferred taxes. The deferred taxes are 33
due and payable in accordance with G.S. 105-277.1F when the displaced residential land loses its 34
eligibility for deferral because of the occurrence of a disqualifying event. A disqualifying event 35

General Assembly Of North Carolina Session 2017
Page 2 House Bill 261-First Edition
occurs when the owner ceases to use the displaced residential land as a permanent residence, 1
unless the cessation is due to any of the following: 2
(1) Temporary absences, as defined in G.S. 105-177.1(a1). 3
(2) Death of the owner, if the subsequent owner is the spouse or child of the owner 4
and uses the residence as a permanent residence. If the subsequent owner ceases 5
to use the residence as a permanent residence, the displaced residential land 6
loses its eligibility for deferral. 7
(3) Divorce of the owner, if the subsequent owner is the spouse of the owner and 8
uses the residence as a permanent residence. If the subsequent owner ceases to 9
use the residence as a permanent residence, the displaced residential land loses 10
its eligibility for deferral. 11
(d) Notice. – On or before September 1 of each year, the collector shall notify each owner 12
to whom a tax deferral has previously been granted of the accumulated sum of deferred taxes and 13
interest. An owner who fails to notify the county assessor when land classified under this section 14
loses its eligibility for classification is subject to a penalty in the amount set in G.S. 105-277.5. 15
(e) Application. – An application for property tax relief provided by this section should be 16
filed during the regular listing period but may be filed after the regular listing period upon a 17
showing of good cause by the applicant for failure to make a timely application, as determined and 18
approved by the board of equalization and review or, if that board is not in session, by the board of 19
county commissioners. An untimely application approved under this subsection applies only to 20
property taxes levied by the county or municipality in the calendar year in which the untimely 21
application is filed. Decisions of the county board may be appealed to the Property Tax 22
Commission. Persons may apply for this property tax relief by entering the appropriate 23
information on a form made available by the assessor under G.S. 105-282.1." 24
SECTION 2. G