Types of Property To Be Taxed

The three main elements of the property tax system in North Carolina are real property, personal property, and motor vehicles. Real property consists of land and buildings. Personal property consists of, for this guide, tangible personal property or all personal property that is not intangible and is not permanently affixed to real property. Motor vehicles, if registered, are assessed according to its registration renewal date.

Real Property

The Machinery Act (General Statute 105, Subchapter II) provides the framework for the listing, assessing, and appraising of both real and personal property in North Carolina. Under G. S. 105-286, all counties are required to conduct a reappraisal at least every eight (8) years. The majority of the counties conduct their reappraisals on this time frame, although a growing segment of counties conducts reappraisals on a four-year cycle. During each year at least 11 of the 100 counties are conducting a county wide reappraisal. A county may choose to conduct its reappraisal "in-house" utilizing their own appraisal staff, by hiring an outside reappraisal firm, or by employing consultants to assist their staff appraisers.

During the years that a general reappraisal is not made in the county, G. S. 105-287 is the operative statute for changing any property values in the county. The assessor is limited to certain circumstances in which he may change the value of real property. These include correcting a clerical or mathematical error, or correcting an appraisal which resulted from a misapplication of the schedules used during the county's last general reappraisal. Also, the assessor may increase or decrease the appraised value of real property, to recognize a change in value caused by factors other than the following: normal physical depreciation of the improvements, economic conditions affecting the county as a whole, or minor improvements to the property such as repainting, landscaping, terracing etc.

Personal Property

All taxable personal property in North Carolina is appraised at its true value in money. The two main exceptions are inventories owned by manufacturers, retailers, wholesalers, and contractors as well as non-business personal property. These types of personal property have been exempted by statute in North Carolina. There are other exemptions for different types of personal property where the ownership and use determine the exempt status. These would have to be looked at on an individual basis. Personal property in North Carolina is appraised each year as of January 1 at its true value in money. The personal property owner should list his or her personal property with the correct county during the regular listing period in January. Extensions for listing personal property may be granted by the County Assessor up to April 15 upon a timely request. The request for extension to list must be made before the end of the regular listing period.

The counties in North Carolina use a trending method to appraise personal property. Counties request taxpayers to list their property at original cost by year of acquisition. The counties then trend the original cost up to reach current replacement cost new and then apply a straight line depreciation schedule to reach market value. Most of the counties use trending schedules developed by the North Carolina Department of Revenue.

The appraised value of any personal property may be appealed to the local county board and then to the North Carolina Property Tax Commission.

Motor Vehicles

The North Carolina General Assembly passed a new law which became effective July 1, 2013 to create a combined motor vehicle registration renewal and property tax collection system (Tag & Tax System). By doing so the new law transfers the responsibility for motor vehicle tax collection from the individual counties across North Carolina to the North Carolina Division of Motor Vehicles (NCDMV).

North Carolina's new Tag & Tax Together System has been designed as a convenient way to pay annual vehicle tag renewals and vehicle property taxes by combining them into one billing.

If your address is current with the NCDMV, you will receive a renewal notice listing both vehicle registration fees and taxes due approximately 60 days prior to the registration expiring. The due date to renew your registration and pay your property tax is the 15th of the month following the expiration of the registration. Interest will begin accruing on the 16th of the month even if the 16th falls on a weekend or holiday.

Ex: If your registration expires on October 31 the renewal notice will be mailed in August and you will have until November 15 before interest.

If you are purchasing a new vehicle either from an individual or a dealer you will owe property tax at the time of purchase unless you choose to be issued a Limited Registration Plate (LRP). This LRP will allow you 60 days from the month of issuance to pay your property tax.

Ex: If I receive a LRP in January the taxes will be due by March 31st.

It is very important that you review your registration renewal for accuracy to verify that you are being taxed in the correct county and taxing district. If the county is incorrect this must be corrected by the LPA/DMV. If you are being taxed in the correct county but the wrong taxing jurisdiction then you must contact the county to get this corrected. Also, if you have any questions regarding the valuation, exemption status, etc you must contact the county.