The state of North Carolina has several property tax relief programs for its residents, including a property tax exclusion program for homeowners who are 65 years of age or older. This program is supervised by the North Carolina Department of Revenue and administered locally by each county's tax assessor's office.
The applicant must be 65 or older and a legal resident of North Carolina. The application can be for a married couple, as long as one is 65 or over. The home must be owned by the applicant and be his legal permanent residence. A vacation or seasonal home is not eligible. Any kind of physical home is eligible, including owned mobile homes. This program has a maximum income restriction, which is subject to adjustment each year. As of the 2011 tax year, that annual income maximum is set at $27,100.
Homeowners who are eligible will pay a lower property tax amount as a result of having part of their home's tax assessment amount excluded from tax. This exclusion amount is $25,000 or 50 percent of the assessed value, whichever is greater. For example, if the home has a property tax assessment of $120,000, then $60,000 would be excluded. Therefore, tax would be due only on the remaining $60,000 instead of the full $120,000. Any tax assessment of under $50,000 would receive the minimum $25,000 exclusion.
An official application must be filed with and received by the tax assessor's office of the county the home is located in by June 1 for eligibility for that tax year. The application only has to be filed once and remains in effect unless the owner becomes ineligible or moves. The application must include the Social Security numbers of all applicants and proof of income, including copies of tax returns. All income is counted in determining eligibility, including Social Security and other retirement or pension income. Gifts and inheritances are excluded.
Partial tax relief may be given to applicants who exceed the maximum income but are otherwise eligible. An eligible owner may apply to receive partial tax benefit even if there is a nonspouse ineligible co-owner. The law requires that changes in eligibility, especially exceeding the annual income limit, be reported by June 1. Failure to so report can result in monetary penalties and interest. If the owner exceeds the income limit in the future, it does not make him liable for the excluded taxes in previous years he was eligible.
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