You May Be Eligible for a Property Tax Break - tax relief - AARP Bull...

North Carolina You May Be Eligible for a Property Tax Break

Summary: Property tax bills are crippling some homeowners. North Carolina has three options for property tax relief. Deadline to apply is June 1. Waterfront homes on Lake Norman have soared in value in recent months, sending tax bills skyward, too. Older people who live on the Iredell County lake have been faced with rising property taxes, and for those on fixed incomes this can mean financial hardship—some could even be taxed out of their homes. In desirable communities, property assessments have risen so much that even if the county holds the line on property tax rates, homeowners can end up paying much higher tax bills. To address this problem, the legislature created a new property tax program to defer taxes until the property changes hands. To the surprise of the county tax staff, only one Iredell resident had signed up in a county of 155,000 earlier this year. County tax staff has tried to spread the word about the Circuit Breaker Tax Deferment Program, said Steven H. Ervin, Iredell real property manager. “We thought we’d have more interest in that [lakefront] area,” Ervin said. “Only one has applied.” encourages older homeowners to take advantage of the three types of property tax relief offered by the state: Anyone 65 or older, or disabled, can apply for a low-income Elderly or Disabled Homestead Exclusion, as long as the owners had an income of $27,100 or less for the previous year. Qualified homeowners can exclude either $25,000 or 50 percent of the home’s value, whichever is greater. Disabled veterans can apply to exclude the first $45,000 of assessed value of their permanent residence. There is no age or income requirement. Then there’s the new Circuit Breaker option, in which a portion of the tax bill is deferred. For households with income less than $27,100, property taxes will be limited to 4 percent of income. For households with income of more than $27,100 but less than $40,650, taxes are limited to 5 percent of income. (Those income limits are for 2010, and are adjusted each year.) For those who qualify, any property tax owed above those limits is deferred. When owners sell, move or pass away, only the last three years of deferred taxes are due, with interest. For instance, if taxes were deferred for 10 years, seven years of taxes would be forgiven. This program is available only to people who have owned and occupied their home for five years. Bill Wilson, AARP North Carolina associate state director for advocacy, said many older homeowners might pass up the potential relief because those deferred taxes are a lien on the home. “They don’t want liens on their homes. They’re very reluctant to do that,” Wilson said. “It would be a lien,” Ervin said. “But it means some of them can stay” in their homes rather than sell because of high taxes. David Baker, director of the Property Tax Division of the state Department of Revenue, said people can get more information by checking their county’s website or calling their county tax office. The has a list of as well as a printable . Homeowners can receive the benefits of only one tax relief program. However, the . After reviewing your application, the assessor will be notify you of your options. The deadline to apply is June 1. It is too soon to tell whether the Circuit Breaker deferment will be helpful to homeowners, said Sen. Dan Clodfelter, a chief sponsor in the General Assembly. “We’ll review. We’ll see if we need to go back and adjust, perhaps increase the thresholds,” said the Mecklenburg Democrat. Allen Norwood is a freelance writer based in Sherrills Ford, N.C.


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