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Property Tax Exemptions  

Any property owner requesting exemption from property tax ” has the burden of establishing the property is entitled to the exemption)” NC General Statute 105.282.1(a).

Exempt Real Property Defined

G.S. 105-278.3(a) Buildings, the land they actually occupy, and additional adjacent land REASONABLY necessary for the convenient use of any such building.

Requirements for exemption from property tax

  1. OWNERSHIP - Property Ownership by a non-profit 501 C-3 organization or other qualified agency.
  2. USE - Wholly and exclusively used for a charitable, religious, or educational, scientific, or literary purpose.
  3. APPLICATION - An exemption application is required for any property requesting property tax exemption. The Tax Office prior to January 31st of the current year must receive all new applications and all applications due for review. In addition, it is the property owner’s responsibility to list any changes in the use or status of the property prior to January 31st of the current tax year.

Once an application has been approved, the property owner must file a new application when new or additional property is acquired or improvements are added or removed, or whenever there is a change in the use of the property. G. S. 105 282.1(2)

All property granted exemption will be reviewed at least once every four years to verify that the property continues to qualify for exemption.

Definition of exempt real estate: N. C. G. S. 105-278.3(a) buildings, the land they actually occupy, and additional adjacent land reasonably necessary for the convenient use of any such building shall be exempted from taxation if wholly owned by a qualified agency.

A property owned by an exempt entity but not in use for an exempt purpose is taxable.

Examples

  1. An office building owned by a church or other 501C-3 corporation but rented or leased to others is taxable.
  2. A parking lot owned by exempt entity, but rented or leased to others for parking is taxable.
  3. The portion of a building that is not used for an exempt purpose or is leased to others is taxable.
  4. Vacant land owned by an exempt entity but not used for an exempt purpose is taxable.

Property used but not owned by an exempt agency is taxable.

Property that meets the ownership and use requirements but did not have an application filed by January 31, of the current year, is taxable.

Exempt property sold before July 1 of the current year to a taxable entity, will be listed and taxable to the new owner for the entire tax year. G. S. 105-285(d)

Requests for information can be made to Real Estate Division, 35 Woodfin Street, Asheville or by telephone at (828) 250-4940.

Property Tax Deferments

Present Use Value Program

The North Carolina General Assembly enacted the Present-Use Value Program, which allows reduced tax assessments for individually owned property used for agriculture, horticulture or forestry. Property accepted into this program is taxed at its “present use value” as a farm. This value is usually less than the market value of the property. The difference between the market value and the present use value is “deferred”. When the property or a portion of the property is removed from the program for any reason, he deferred taxes for the current year and the previous three years plus interest becomes due. Applications for this program are taken during the listing period in January of each year. Basic eligibility requirements follow:

Agricultural

Agricultural use is land that is a part of a farm unit actively engaged in the commercial production or growing of crops, plants, or animals under a sound management program. The requirements for an agricultural deferment are as follows:

  • One tract must consist of at least 10 acres that are in actual production of agricultural products.
  • May consist of more than one tract of agricultural land, but at least one of the tracts must meet the requirements and each tract must be under a sound management program.
  • Must have produced an average gross income from agricultural products of at least one thousand dollars ($1,000) per year for the three years preceding January 1 of the year in which this benefit is claimed. Gross income includes income from the sale of the agricultural products produced from the land and any payments received under a governmental soil conservation or land retirement program.
  • If individually owned, the property must be the owner's residence or have been owned by the current owner or a relative of the current owner for four years preceding January 1 of the year in which this benefit is claimed.
  • If property loses it's eligibility for any reason, deferred taxes become due for the current year plus three previous years, plus interest for all prior years. If only a part of the qualifying tract loses it's eligibility, a determination shall be made of the amount of deferred taxes applicable to that part, and that amount shall become payable with interest.

Forestland

Forestland use is land that is part of a forest unit that is actively engaged in the commercial growing of trees under a sound management program. The requirements for a forestland deferment are as follows:

  • One tract must consist of at least 20 acres that are in actual production of trees.
  • May consist of more than one tract of forestland, but at least one of the tracts must meet the requirements and each tract must be under a sound management program.
  • If individually owned, the property must be the owner's residence or have been owned by the current owner or a relative of the current owner for four years preceding January 1 of the year in which the benefit is claimed.
  • If property loses it's eligibility for any reason, deferred taxes become due for the current year plus three previous years, plus interest for all prior years. If only a part of the qualifying tract loses it's eligibility, a determination shall be made of the amount of deferred taxes applicable to that part, and that amount shall become payable with interest.

Horticultural

Horticultural land means land that is a part of a horticultural unit that is actively engaged in the commercial production or growing of fruits or vegetables or nursery or floral products under a sound management program. The requirements for a horticultural deferment are as follows:

  • One tract must consist of at least 5 acres that are in actual production of horticultural products..
  • May consist of more than one tract of horticultural land, but at least one of the tracts must meet the requirements and each tract must be under a sound management program.
  • Must have produced an average gross income from horticultural products of at least one thousand dollars ($1,000) per year for the three years preceding January 1 of the year in which this benefit is claimed. Gross income includes income from the sale of the horticultural products produced from the land and any payments received under a governmental soil conservation or land retirement program.
  • If individually owned, the property must be the owner's residence or have been owned by the current owner or a relative of the current owner for four years preceding January 1 of the year in which the benefit is claimed.

If property loses it's eligibility for any reason, deferred taxes become due for the current year plus three previous years, plus interest for all prior years. If only a part of the qualifying tract loses it's eligibility, a determination shall be made of the amount of deferred taxes applicable to that part, and that amount shall become payable with interest.

Historical Property

Historical property is real property designated as a historic structure or site by a local ordinance adopted by the Historical Property Commission. Property that is classified as historical shall be taxed on the basis of fifty percent (50%) of the true appraised value of the historic portion of the property.

Once the property has been designated as historical property, the owner is required to contact the local Tax Assessor's Office during the listing period (January 1-January 31) for a historical deferment application.

The deferred taxes will not become due unless or until the property loses it's eligibility for the benefit of this classification. This could occur because of a change in an ordinance designation or a change in the property which causes it's historical significance to be lost or substantially impaired.

Forms and Information