§ 105-277.1B. (Effective for taxes imposed for taxable years beginning on or after July 1, 2009) Property tax homestead circuit breaker. - North Carolina Statutes

§ 105‑277.1B. (Effective for taxes imposed for taxable years beginning on or after July 1,2009) Property tax homestead circuit breaker.

(a)        Classification. – Apermanent residence owned and occupied by a qualifying owner is designated aspecial class of property under Article V, Section 2(2) of the North CarolinaConstitution and is taxable in accordance with this section.

(b)        Definitions. – Thedefinitions provided in G.S. 105‑277.1 apply to this section.

(c)        Income EligibilityLimit. – The income eligibility limit provided in G.S. 105‑277.1(a2)applies to this section.

(d)        Qualifying Owner. –For the purpose of qualifying for the property tax homestead circuit breakerunder this section, a qualifying owner is an owner who meets all of thefollowing requirements as of January 1 preceding the taxable year for which thebenefit is claimed:

(1)        The owner has anincome for the preceding calendar year of not more than one hundred fiftypercent (150%) of the income eligibility limit specified in subsection (c) ofthis section.

(2)        The owner has ownedthe property as a permanent residence for at least five consecutive years andhas occupied the property as a permanent residence for at least five years.

(3)        The owner is atleast 65 years of age or totally and permanently disabled.

(4)        The owner is a NorthCarolina resident.

(e)        Multiple Owners. – Apermanent residence owned and occupied by husband and wife is entitled to thefull benefit of the property tax homestead circuit breaker notwithstanding thatonly one of them meets the length of occupancy and ownership requirements andthe age or disability requirement of this section. When a permanent residenceis owned and occupied by two or more persons other than husband and wife, noproperty tax homestead circuit breaker is allowed unless all of the ownersqualify and elect to defer taxes under this section.

(f)         Tax Limitation. – Aqualifying owner may defer the portion of the principal amount of tax that isimposed for the current tax year on his or her permanent residence and exceedsthe percentage of the qualifying owner's income set out in the table in thissubsection. If a permanent residence is subject to tax by more than one taxingunit and the total tax liability exceeds the tax limit imposed by this section,then both the taxes due under this section and the taxes deferred under thissection must be apportioned among the taxing units based upon the ratio eachtaxing unit's tax rate bears to the total tax rate of all units.

Income Over                                   IncomeUp To                                           Percentage

                                                        ‑0‑                                   IncomeEligibility Limit        4.0%

Income Eligibility Limit                      150% ofIncome Eligibility Limit                       5.0%

(g)        Temporary Absence.– An otherwise qualifying owner does not lose the benefit of this circuitbreaker because of a temporary absence from his or her permanent residence forreasons of health, or because of an extended absence while confined to a resthome or nursing home, so long as the residence is unoccupied or occupied by theowner's spouse or other dependent.

(h)        Deferred Taxes. – Thedifference between the taxes due under this section and the taxes that wouldhave been payable in the absence of this section are a lien on the realproperty of the taxpayer as provided in G.S. 105‑355(a). The differencein taxes must be carried forward in the records of each taxing unit as deferredtaxes. The deferred taxes for the preceding three fiscal years are due andpayable in accordance with G.S. 105‑277.1F when the property loses itseligibility for deferral as a result of a disqualifying event described insubsection (i) of this section. On or before September 1 of each year, thecollector must send to the mailing address of a residence on which taxes havebeen deferred a notice stating the amount of deferred taxes and interest thatwould be due and payable upon the occurrence of a disqualifying event.

(i)         DisqualifyingEvents. – Each of the following constitutes a disqualifying event:

(1)        The owner transfersthe residence. Transfer of the residence is not a disqualifying event if (i)the owner transfers the residence to a co‑owner of the residence or, aspart of a divorce proceeding, to his or her spouse and (ii) that individualoccupies or continues to occupy the property as his or her permanent residence.

(2)        The owner dies.Death of the owner is not a disqualifying event if (i) the owner's share passesto a co‑owner of the residence or to his or her spouse and (ii) thatindividual occupies or continues to occupy the property as his or her permanentresidence.

(3)        The owner ceases touse the property as a permanent residence.

(j)         Gap in Deferral. –If an owner of a residence on which taxes have been deferred under this sectionis not eligible for continued deferral for a tax year, the deferred taxes arecarried forward and are not due and payable until a disqualifying event occurs.If the owner of the residence qualifies for deferral after one or more years inwhich he or she did not qualify for deferral and a disqualifying event occurs,the years in which the owner did not qualify are disregarded in determining thepreceding three years for which the deferred taxes are due and payable.

(k)        Repealed by SessionLaws 2008‑35, s. 1.2, effective July 1, 2008.

(l)         CreditorLimitations. – A mortgagee or trustee that elects to pay any tax deferred bythe owner of a residence subject to a mortgage or deed of trust does notacquire a right to foreclose as a result of the election. Except forrequirements dictated by federal law or regulation, any provision in amortgage, deed of trust, or other agreement that prohibits the owner fromdeferring taxes on property under this section is void.

(m)       Construction. – Thissection does not affect the attachment of a lien for personal property taxesagainst a tax‑deferred residence.

(n)        Application. – Anapplication for property tax relief provided by this section should be filedduring the regular listing period, but may be filed and must be accepted at anytime up to and through June 1 preceding the tax year for which the relief isclaimed. Persons may apply for this property tax relief by entering theappropriate information on a form made available by the assessor under G.S. 105‑282.1. (2007‑484,s. 43.7T(b); 2007‑497, s. 2.3; 2008‑35, s. 1.2; 2009‑445, s.22(b).)