Property Tax Law
In order to meet its budget, counties and municipalities assess and collect property or real estate taxes, also known as ad valorem taxes. Local governments, such as your city and county, have the authority to collect real estate tax debt through the use of tax liens and tax foreclosure sales.
The names of all property owners who have not paid their real estate taxes for the prior year will be published, typically in a local newspaper, each year. After the names are published the local Tax Collector can file a tax foreclosure action to sell your property at public auction. This foreclosure action will include all parties who have an interest in the property so they will receive notice of the pending tax lien foreclosure sale. The entire process from serving notice to eventual sale can take up to six months or more.
When a taxpayer becomes delinquent, he can avoid the foreclosure sale by paying the delinquent taxes. This will require paying all past due taxes, penalties, and interest in addition to the government’s costs in filing any tax liens and attempting to foreclose on the property.
If you are behind on your real estate tax obligations and receive a notice of tax sale, it is wise to speak with an attorney in order to understand your options fully. For example, taxpayers have a period of time after the foreclosure sale to "redeem" their property by paying the obligation and expenses in full, thereby reversing the foreclosure sale. However, there are numerous misconceptions about how this process works and how long the taxpayer has to act. Additionally, the taxpayer has a period of time after a sale to challenge the validity of title.
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Property Tax Assessments
In order to charge you property taxes, your local governments must first establish a value for, or assess, your property. Each county in North Carolina is required to revalue or reassess real property no less than every eight years. The revaluation process could result in an increase or decrease of your property value, with an increase likely resulting in an increase in your property tax bill. You have the ability to challenge the value the county places on your real property by filing a written appeal to your local Board of Equalization and Review. You also have some ability to challenge the value of your property in non-revaluation years. Obtaining the assistance of an attorney to guide you through this process will help you to avoid missed deadlines in this technical appeal process.
Real Estate Tax Law and Abatement Programs
Some governments offer abatements or property tax relief programs. In North Carolina, taxpayers over 65 years of age can apply for a scaled, fixed property tax based on their income. It is called the Circuit Breaker Tax Deferment Program and absolves the taxpayer of any amount due over and above their income limitations. Property tax relief is available to honorably discharged veterans through the Elderly or Disabled Veteran Exclusion program.
In 2008, the state enacted legislation that exempts 80% of the value of a solar energy electric system (PV system) from property tax in some cases. If the system is residential and not connected with a business in any way, it may be entirely exempt from tax.