Property Tax

At the county level, Boards of Commissioners have the ability to lower or property tax rates in North Carolina. Municipalities also have used property taxes to fund local services. Property taxes have long been used to fund education in other states and there are a growing number of localities and states across the country that allocate a portion of property tax dollars to early education.

Local governments in North Carolina have the authority to raise property taxes for specific purposes designated by the North Carolina General Assembly. Within the area of community development programs and activities, child care, health and education are listed explicitly. However, in consulting with several NC local government experts, it remains unclear if a broad set of early childhood programs or initiatives could qualify.

Typically, property tax revenue goes to the local government’s General Fund for a range of public services and expanded dollars can provide for new services and programs. North Carolina has low property tax rates compared to most of the nation. However, changes in housing values due to economic changes – the Great Recession for example – can impact the level of revenue raised from the local property tax, which in turn can make balancing local budgets using property taxes difficult.

How Does it Work?

The property tax in North Carolina is levied on real and personal property. Real property refers to an asset that is taxed to one location like a house or commercial building. Personal property refers to an asset that is moveable, such as a car.

The tax is the value of property based on its assessment value, which is updated periodically. In North Carolina, counties conduct assessments or re-valuations at least every eight years, but many currently operate on a four-year cycle for assessments. The rates are presented per $100 valuation. For example, Alamance County’s property tax rate is $0.58 per $100 in valuation.

Certain types of property are exempt from property tax. Non-profits, government and certain academic and religious properties are exempt.

Who Collects it?

Local governments collect their own taxes, but some contract with other entities to collect property taxes on their behalf. Municipalities often contract with the county to collect the tax with the help of the County Assessor and tax collectors.

What is it Used for Now?

Roughly 38 percent of local revenue comes from the property tax to support local services.