House Bill 432, titled the “Property Tax Relief Study,” unanimously passed the North Carolina House last week and would examine ways to cut the property tax bill for some North Carolinians who struggle to keep up with spiking home values.
Now headed to the Senate, the bill would direct the Revenue Laws Study Committee to examine existing property-tax relief programs and determine whether changes are needed to reduce the burden on certain vulnerable homeowner populations, and what the impact would be on local governments.
“Since the pandemic, North Carolina home values have skyrocketed by 67.1%, creating concern among homeowners about the affordability of their property tax bills,” wrote Joe Harris, fiscal policy analyst for the John Locke Foundation. “Individuals on fixed incomes, such as the elderly and disabled, are particularly burdened by higher property taxes.”
Harris offered an explainer of the current property-tax relief plans available in North Carolina and how to apply.
The current property-tax system, outlined in Chapter 105 Article 12 of the General Statutes, requires all real and personal property to be listed, appraised, and taxed annually unless specifically exempted. Local governments set property tax rates each year and use that revenue to fund public services. Certain properties — such as those owned by nonprofits or qualifying veterans or elderly — may be exempt from property taxation under certain state programs.
Lawmakers voted 110-0 to authorize the study into whether increasing income thresholds and exclusion amounts, redefining income eligibility, or restructuring deferred tax programs would help. The study will also look at whether capping annual property tax increases, allowing installment payments would cut the burden for the targeted groups.
However, property taxes are critical for local services, so the committee will study how making these changes would impact local government revenues. The findings and any proposed legislative changes are due to be reported to the 2026 General Assembly.
A recent report from the Tax Foundation ranks North Carolina as having the 14th lowest property tax burden in the nation. Within the state, Northampton County has the highest effective property tax rate at 1.2%, while Jackson County has the lowest at 0.369%.
The bill now moves to the North Carolina Senate for consideration.