NC Newsline – Despite bipartisan support for bills to expand the state’s property tax relief programs for elderly and disabled North Carolinians, there’s unlikely to be movement on the legislation this year.
State lawmakers have gotten an earful from senior citizens and others on fixed incomes who worry that rising property taxes across the state will make it impossible for them to remain in their homes.
“I think that the concern that members are having is that if the General Assembly passes some large property tax relief exemption without providing any kind of corresponding source of revenues that counties are going to be facing budget shortfalls of their own and having to make rather drastic cuts for services,” said Rep. Tim Longest (D-Wake), who supports additional property tax relief.
Longest noted that the House’s version of the budget pauses scheduled income tax cuts, which he said would offset revenue counties would lose if eligibility for homestead exemption programs is expanded to allow more people to qualify.
“We can’t cut our way to revenue, and if we want to ensure fairness for older people and people with disabilities, people that can’t afford their homes, then we need to make sure that that loss of revenue is offset somewhere else,” Longest said.
The N.C. Association of County Commissioners (NCACC), a nonpartisan organization that serves as the official voice of the state’s 100 counties, opposes property tax relief legislation, citing concerns about revenue losses for counties.
In a March letter to the General Assembly, Kevin Leonard, the NCACC’s executive director, wrote that local leaders agree that relief is needed but that mandating property tax exemptions at the state level is not the answer.
“If these bills pass as currently drafted, they would create an unfunded mandate on counties,” Leonard said. “Because counties have limited options to generate revenue — primarily relying on property and sales taxes — the revenue lost due to these exemptions would have to be offset through other means.”
Counties would be forced to raise taxes on property owners or cut critical services such as public safety, social services or disaster recovery efforts, Leonard said.
“While all counties would face these decisions, the impact would be more severe for counties affected by Tropical Storm Helene,” Leonard said. “These counties already face reduced property tax revenue for FY 2025-26 and beyond because real property that was damaged and not repaired or replaced as of January 1, 2025, will be excluded from the tax base for the upcoming year.”
Rising property tax rates in the state’s urban areas such as Mecklenburg, Wake, Durham and Orange counties are a big concern for senior citizens fighting to stay in their homes amid rising tax bills.
Rep. Erin Paré (R-Wake) said she believes the General Assembly still has an appetite to provide relief for citizens struggling to pay high property taxes.
“I’m still waiting to see if the finance chairs are going to take a vote on any piece of legislation dealing with this issue in the House, but it’s my understanding that that this is widely supported among the members of the House to do something about the issue,” Paré said.
Paré is a sponsor of House Bill 59, which would expand homestead exclusions for the elderly and disabled. Senate Bill 349 would provide similar relief.
North Carolina currently offers three property tax relief programs for qualified homeowners that are administered by counties:
The Elderly/Disabled Homestead Exemption is for residents 65 years or older or those who are totally and permanently disabled. The program excludes from taxes the greater of $25,000 or 50% of the assessed value of the owner’s permanent residence. To qualify, income for the preceding year must be $37,900 or less, including both incomes for a married couple.
The “Circuit Breaker” limits the amount of annual property taxes the owner pays on their permanent residence. Eligibility is limited to homeowners who are 65 and older or who are totally and permanently disabled. The tax bill is limited to a fixed percentage of income, and any taxes owed above that limit is deferred until a “disqualifying event” such as the owner’s death. This program requires a new application to be filed every year.
The Disabled Veteran Exclusion program excludes up to the first $45,000 of the appraised value of the permanent residence of a disabled veteran who has a total and permanent service-connected disability or who received benefits for specially adapted housing. There is no age or income limitation for this program.
Paré said it’s time to modify the $37,900 income limit for the elderly/disabled exemption, so more people qualify.
“That’s just not realistic,” Paré said. I think that with the cost of living in some of the more high cost-of-living counties, that just seems ridiculous.”
A proposed amended version of HB 59 offered up last month during a bill discussion in the House Committee on Pensions and Retirement would link eligibility for the age/disability exemption to a county’s area median income. Doing so, she said, would ease the burden on low wealth counties.
“That’s the most accurate way to do it,” Paré said. “I would just say that the only alternative would be for towns to budget differently and take the tax burden down for everybody, which I think is a good thing.”
The proposed amendment would also set an area median income limit of 70% for a two-person household to qualify for the Circuit Breaker exemption. Applicants would be required to file an application for the Circuit Breaker every three years instead of every year under the proposal.
