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North Carolina House Bill H432

North Carolina 2025-2026 Regular Session

North Carolina House Bill H432 Compare Versions

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11 GENERAL ASSEMBLY OF NORTH CAROLINA
22 SESSION 2025
3-H 2
3+H 1
44 HOUSE BILL 432
5-Committee Substitute Favorable 4/15/25
65
7-Short Title: Property Tax Relief Study. (Public)
8-Sponsors:
9-Referred to:
6+
7+Short Title: Protect Our Homes Act. (Public)
8+Sponsors: Representatives Echevarria, Winslow, N. Jackson, and Dixon (Primary
9+Sponsors).
10+For a complete list of sponsors, refer to the North Carolina General Assembly web site.
11+Referred to: Finance, if favorable, Rules, Calendar, and Operations of the House
1012 March 19, 2025
11-*H432 -v-2*
13+*H432 -v-1*
1214 A BILL TO BE ENTITLED 1
13-AN ACT TO DIRECT THE REVENUE LAWS STUDY COMMITTEE TO EXAMINE THE 2
14-CURRENT PROPERTY TAX RELIEF PROGRAMS FOR ELDERLY, DISABLED, AND 3
15-DISABLED VETERAN HOM EOWNERS; TO EVALUATE WHETHER ANY 4
16-MODIFICATIONS SHOULD BE MADE TO REDUCE THE PROPERTY TAX BURDEN 5
17-ON THOSE HOMEOWNERS; TO CONSIDER OTHER PROPERTY TAX REFORMS; 6
18-AND TO REPORT ITS FINDINGS AND RECOMMEND ATIONS, IF ANY, TO THE 2026 7
19-REGULAR SESSION OF THE GENERAL ASSEMBLY. 8
20-The General Assembly of North Carolina enacts: 9
21-SECTION 1. The Revenue Laws Study Committee is directed to study options for 10
22-enhancing the property tax relief currently afforded to low-income, elderly, and disabled citizens 11
23-and disabled veterans and consider other property tax reforms that may reduce the property tax 12
24-burden while balancing the potential impact on local government revenues. In conducting the 13
25-study, the Committee may do the following: 14
26-(1) Examine the following property tax relief programs currently available for 15
27-certain homeowners: (i) elderly or disabled property tax homestead exclusion 16
28-(G.S. 105-277.1), (ii) property tax homestead circuit breaker 17
29-(G.S. 105-277.1B), and (iii) disabled veteran property tax homestead 18
30-exclusion (G.S. 105-277.1C). 19
31-(2) Evaluate options that could provide additional property tax relief under the 20
32-programs listed in subdivision (1) of this section, such as: 21
33-a. Increasing the exclusion amounts. 22
34-b. Increasing the income threshold or examining the definition of 23
35-"income." 24
36-c. With respect to the circuit breaker, modifying the deferred tax 25
37-obligation or the age and disability requirements, raising the income 26
38-limit, or tying the income limit to a percentage of area median income. 27
39-(3) Consider mechanisms that would expand property tax relief to homeowners 28
40-more broadly, such as limiting year-to-year property tax increases and 29
41-valuation growth, providing homeowners with alternative payment plans, or 30
42-implementing methods, such as annual statistical adjustments, to capture 31
43-year-over-year property valuation changes to minimize the impact of 32
44-reappraisals. 33
45-(4) Examine the uniformity requirement in Article V, Section 2 of the North 34
46-Carolina Constitution and evaluate whether to amend the North Carolina 35 General Assembly Of North Carolina Session 2025
47-Page 2 House Bill 432-Second Edition
48-Constitution to allow counties the option of making one or more of these 1
49-changes at the local level. 2
50-(5) Consider the positive and negative impacts on local government ad valorem 3
51-tax revenues of providing additional property tax relief and whether the State 4
52-should reimburse local governments or provide local governments with 5
53-additional revenue-generating authority to backfill lost revenue due to 6
54-enhanced property tax relief. As part of this consideration, the Committee may 7
55-seek input from the North Carolina Association of County Commissioners or 8
56-the North Carolina League of Municipalities. 9
57-(6) Review property tax relief programs in other states. 10
58-The Committee may consult with any other relevant State, local, or private entity in 11
59-conducting the study required by this act. The Committee must report its findings, along with 12
60-any legislative recommendations, to the 2026 Regular Session of the 2025 General Assembly. 13
61-SECTION 2. This act is effective when it becomes law. 14
15+AN ACT TO INCREASE T HE EXCLUSION AMOUNT UNDER THE ELDERLY OR 2
16+DISABLED PROPERTY TA X HOMESTEAD EXCLUSIO N, TO EXPAND THE 3
17+DISABLED VETERAN PRO PERTY TAX HOMESTEAD EXCLUSION, TO CREATE 4
18+THE HOMEOWNER ADVANT AGE PROPERTY TAX REL IEF PROGRAM AND THE 5
19+ELDERLY PROPERTY TAX HOMESTEAD CIRCUIT BREAKER PROGRAM AND T O 6
20+MAKE CONFORMING CHAN GES NECESSARY TO IMP LEMENT THOSE 7
21+PROGRAMS, AND TO CRE ATE EXEMPTIONS TO TH E FORCED SALE OF A 8
22+HOMESTEAD. 9
23+The General Assembly of North Carolina enacts: 10
24+SECTION 1.(a) G.S. 105-277.1 reads as rewritten: 11
25+"§ 105-277.1. Elderly or disabled property tax homestead exclusion. 12
26+(a) Exclusion. – A permanent residence owned and occupied by a qualifying owner is 13
27+designated a special class of property under Article V, Sec. 2(2) of the North Carolina 14
28+Constitution and is taxable in accordance with this section. The amount of the appraised value of 15
29+the residence equal to the exclusion amount is excluded from taxation. The exclusion amount is 16
30+the greater of twenty five thousand dollars ($25,000) (i) fifty thousand dollars ($50,000) or (ii) 17
31+fifty percent (50%) of the appraised value of the residence. An owner who receives an exclusion 18
32+under this section may not receive other property tax relief. 19
33+… 20
34+(a2) Income Eligibility Limit. – For the taxable year beginning on July 1, 2008, 2026, the 21
35+income eligibility limit is twenty-five thousand dollars ($25,000). forty-eight thousand dollars 22
36+($48,000). For taxable years beginning on or after July 1, 2009, 2027, the income eligibility limit 23
37+is the amount for the preceding year, adjusted by the same percentage of this amount as the 24
38+percentage of any cost-of-living adjustment made to the benefits under Titles II and XVI of the 25
39+Social Security Act for the preceding calendar year, rounded to the nearest one hundred dollars 26
40+($100.00). On or before July 1 of each year, the Department of Revenue must determine the 27
41+income eligibility amount to be in effect for the taxable year beginning the following July 1 and 28
42+must notify the assessor of each county of the amount to be in effect for that taxable year. 29
43+(b) Definitions. – The following definitions apply in this section: 30
44+… 31
45+(3a) Property tax relief. – The property tax homestead exclusion provided in this 32
46+section, the property tax homestead circuit breaker provided in 33
47+G.S. 105-277.1B, or the disabled veteran property tax homestead exclusion 34 General Assembly Of North Carolina Session 2025
48+Page 2 House Bill 432-First Edition
49+provided in G.S. 105-277.1C.G.S. 105-277.1C, the homeowner advantage 1
50+property tax relief provided in G.S. 105-277.1E, or the elderly property tax 2
51+homestead circuit breaker provided in G.S. 105-277.1G. 3
52+…." 4
53+SECTION 1.(b) G.S. 105-277.1C reads as rewritten: 5
54+"§ 105-277.1C. Disabled veteran property tax homestead exclusion. 6
55+(a) Classification. – A permanent residence owned and occupied by a qualifying owner 7
56+is designated a special class of property under Article V, Section 2(2) of the North Carolina 8
57+Constitution and is taxable in accordance with this section. The first forty-five thousand dollars 9
58+($45,000) lesser of (i) fifty percent (50%) of the appraised value of the residence or (ii) one 10
59+hundred thousand dollars ($100,000) is excluded from taxation. A qualifying owner who receives 11
60+an exclusion under this section may not receive other property tax relief. 12
61+…." 13
62+SECTION 1.(c) Article 12 of Chapter 105 of the General Statutes is amended by 14
63+adding three new sections to read: 15
64+"§ 105-277.1E. Homeowner advantage property tax relief. 16
65+(a) Classification. – A permanent residence owned and occupied by a qualifying owner 17
66+is designated a special class of property under Article V, Section 2(2) of the North Carolina 18
67+Constitution and is taxable in accordance with this section. 19
68+(b) Definitions. – The following definitions apply in this section: 20
69+(1) Baseline value. – The appraised value of a permanent residence as of January 21
70+1 of the baseline year. 22
71+(2) Baseline year. – The first year in which a qualifying owner receives property 23
72+tax relief under this section. 24
73+(3) Owner. – Defined in G.S. 105-277.1. 25
74+(4) Permanent residence. – Defined in G.S. 105-277.1. 26
75+(5) Rate of inflation. – The percentage change in the Consumer Price Index for 27
76+All Urban Consumers, U.S. City Average, All Items, as published by the 28
77+Bureau of Labor Statistics of the United States Department of Labor. 29
78+(c) Qualifying Owner. – For the purpose of qualifying for the homeowner advantage 30
79+property tax relief under this section, a qualifying owner is an owner who meets all of the 31
80+following requirements as of January 1 preceding the taxable year for which the benefit is 32
81+claimed: 33
82+(1) The owner has occupied the property as a permanent residence for at least two 34
83+years immediately preceding the owner's filing for property tax relief under 35
84+this section. 36
85+(2) The owner is a North Carolina resident. 37
86+(d) Limitation. – Except as provided in subsection (e) of this section, the taxable value of 38
87+the permanent residence of a qualifying owner shall not exceed its baseline value by an amount 39
88+more than (i) the average rate of inflation per year between consecutive general reappraisals, or 40
89+three percent (3%) per year, whichever is less, and (ii) fifteen percent (15%) cumulatively. 41
90+(e) Exceptions. – Except as provided in subdivision (1) of this subsection, the county 42
91+shall reappraise the permanent residence of a qualifying owner at its true value in a year in which 43
92+any of the following conditions are met: 44
93+(1) There is a physical change in the land or to improvements on the land other 45
94+than a change listed in G.S. 105-287(b); provided that a reappraisal of a 46
95+permanent residence under this subdivision shall only consider factors that are 47
96+directly attributable to the change or improvement and shall not consider 48
97+external market forces or other factors otherwise includable in the 49
98+determination of true value. A qualifying owner shall provide all relevant 50
99+documentation necessary for a reappraisal under this subdivision on a form 51 General Assembly Of North Carolina Session 2025
100+House Bill 432-First Edition Page 3
101+and in a manner prescribed by the Department. The permanent residence of a 1
102+qualifying owner who fails to provide necessary documentation under this 2
103+subdivision may be reappraised at true value. A residence reappraised under 3
104+this subdivision shall be subject to subsection (d) of this section at the time of 4
105+subsequent reappraisals conducted pursuant to G.S. 105-286. 5
106+(2) Except as provided in subsections (f), (i), and (j) of this section, the qualifying 6
107+owner no longer occupies the residence as a permanent residence. 7
108+(f) Temporary Absence. – An otherwise qualifying owner does not lose the benefit of 8
109+this property tax relief because of a temporary absence from his or her permanent residence for 9
110+reasons of health, or because of an extended absence while confined to a rest home or nursing 10
111+home, so long as the residence is unoccupied or occupied by the owner's spouse or other 11
112+dependent. 12
113+(g) Application. – An application for property tax relief provided by this section should 13
114+be filed during the regular listing period but may be filed and must be accepted at any time up to 14
115+and through June 1 preceding the tax year for which the relief is claimed. Persons may apply for 15
116+this property tax relief by entering the appropriate information on a form made available by the 16
117+assessor under G.S. 105-282.1. 17
118+(h) Multiple Ownership. – A permanent residence owned and occupied by a husband and 18
119+wife is entitled to the full benefit of the property tax relief under this section notwithstanding that 19
120+only one of them meets the length of occupancy requirement of this section. When a permanent 20
121+residence is owned and occupied by two or more persons other than husband and wife, no 21
122+property tax relief is allowed under this section unless all of the owners qualify. 22
123+(i) Death of Owner. – A permanent residence owned and occupied by a qualifying owner 23
124+is entitled to the full benefit of the property tax relief under this section notwithstanding the death 24
125+of the owner provided that (i) the deceased owner's share passes to a co-owner of the residence 25
126+or to the deceased owner's spouse and (ii) that individual occupies or continues to occupy the 26
127+property as their permanent residence. 27
128+(j) Transfer. – A permanent residence owned and occupied by a qualifying owner is 28
129+entitled to the full benefit of the property tax relief under this section notwithstanding the transfer 29
130+of the residence by the owner provided that (i) the owner transfers the residence to a co-owner 30
131+of the residence or, as part of a divorce proceeding, to the owner's spouse and (ii) that individual 31
132+occupies or continues to occupy the property as their permanent residence. 32
133+"§ 105-277.1G. Elderly property tax homestead circuit breaker. 33
134+(a) Classification. – A permanent residence owned and occupied by a qualifying owner 34
135+is designated a special class of property under Article V, Section 2(2) of the North Carolina 35
136+Constitution and is taxable in accordance with this section. 36
137+(b) Definitions. – The definitions provided in G.S. 105-277.1 apply to this section. 37
138+(c) Income Eligibility Limit. – The income eligibility limit provided in 38
139+G.S. 105-277.1(a2) applies to this section. 39
140+(d) Qualifying Owner. – For the purpose of qualifying for the elderly property tax 40
141+homestead circuit breaker under this section, a qualifying owner is an owner who meets all of the 41
142+following requirements as of January 1 preceding the taxable year for which the benefit is 42
143+claimed: 43
144+(1) The owner has an income for the preceding calendar year of not more than 44
145+one hundred percent (100%) of the income eligibility limit specified in 45
146+subsection (c) of this section. 46
147+(2) The owner has owned the property as a permanent residence for at least 10 47
148+consecutive years and has occupied the property as a permanent residence for 48
149+at least 10 years. 49
150+(3) The owner is at least 85 years of age. 50
151+(4) The owner is a North Carolina resident. 51 General Assembly Of North Carolina Session 2025
152+Page 4 House Bill 432-First Edition
153+(e) Multiple Owners. – A permanent residence owned and occupied by husband and wife 1
154+is entitled to the full benefit of the elderly property tax homestead circuit breaker notwithstanding 2
155+that only one of them meets the length of occupancy and ownership requirements and the age 3
156+requirement of this section. When a permanent residence is owned and occupied by two or more 4
157+persons other than husband and wife, no elderly property tax homestead circuit breaker is allowed 5
158+unless all of the owners qualify and elect to defer taxes under this section. 6
159+(f) Tax Limitation. – A qualifying owner may defer the portion of the principal amount 7
160+of tax that is imposed for the current tax year on his or her permanent residence and exceeds the 8
161+percentage of the qualifying owner's income set out in the table in this subsection. If a permanent 9
162+residence is subject to tax by more than one taxing unit and the total tax liability exceeds the tax 10
163+limit imposed by this section, then both of the taxes due under this section and the taxes deferred 11
164+under this section must be apportioned among the taxing units based upon the ratio each taxing 12
165+unit's tax rate bears to the total tax rate of all units. 13
166+Income Over Income Up To Percentage 14
167+ -0- Income Eligibility Limit 0% 15
168+(g) Temporary Absence. – An otherwise qualifying owner does not lose the benefit of 16
169+this circuit breaker because of a temporary absence from his or her permanent residence for 17
170+reasons of health, or because of an extended absence while confined to a rest home or nursing 18
171+home, so long as the residence is unoccupied or occupied by the owner's spouse or other 19
172+dependent. 20
173+(h) Deferred Taxes. – The difference between the taxes due under this section and the 21
174+taxes that would have been payable in the absence of this section are a lien on the real property 22
175+of the taxpayer as provided in G.S. 105-355(a). The difference in taxes must be carried forward 23
176+in the records of each taxing unit as deferred taxes. The deferred taxes for the preceding three 24
177+fiscal years are due and payable in accordance with G.S. 105-277.1F when the property loses its 25
178+eligibility for deferral as a result of a disqualifying event described in subsection (i) of this 26
179+section. On or before September 1 of each year, the collector must send to the mailing address of 27
180+a residence on which taxes have been deferred a notice stating the amount of deferred taxes and 28
181+interest that would be due and payable upon the occurrence of a disqualifying event. 29
182+(i) Disqualifying Events. – Each of the following constitutes a disqualifying event: 30
183+(1) The owner transfers the residence. Transfer of the residence is not a 31
184+disqualifying event if (i) the owner transfers the residence to a co-owner of 32
185+the residence or, as part of a divorce proceeding, to his or her spouse and (ii) 33
186+that individual occupies or continues to occupy the property as his or her 34
187+permanent residence. 35
188+(2) The owner dies. Death of the owner is not a disqualifying event if (i) the 36
189+owner's share passes to a co-owner of the residence or to his or her spouse and 37
190+(ii) that individual occupies or continues to occupy the property as his or her 38
191+permanent residence. 39
192+(3) The owner ceases to use the property as a permanent residence. 40
193+(j) Gap in Deferral. – If an owner of a residence on which taxes have been deferred under 41
194+this section is not eligible for continued deferral for a tax year, the deferred taxes are carried 42
195+forward and are not due and payable until a disqualifying event occurs. If the owner of the 43
196+residence qualifies for deferral after one or more years in which he or she did not qualify for 44
197+deferral and a disqualifying event occurs, the years in which the owner did not qualify are 45
198+disregarded in determining the preceding three years for which the deferred taxes are due and 46
199+payable. 47
200+(k) Creditor Limitations. – A mortgagee or trustee that elects to pay any tax deferred by 48
201+the owner of a residence subject to a mortgage or deed of trust does not acquire a right to foreclose 49
202+as a result of the election. Except for requirements dictated by federal law or regulation, any 50 General Assembly Of North Carolina Session 2025
203+House Bill 432-First Edition Page 5
204+provision in a mortgage, deed of trust, or other agreement that prohibits the owner from deferring 1
205+taxes on property under this section is void. 2
206+(l) Construction. – This section does not affect the attachment of a lien for personal 3
207+property taxes against a tax-deferred residence. 4
208+(m) Application. – An application for property tax relief provided by this section should 5
209+be filed during the regular listing period but may be filed and must be accepted at any time up to 6
210+and through June 1 preceding the tax year for which the relief is claimed. Persons may apply for 7
211+this property tax relief by entering the appropriate information on a form made available by the 8
212+assessor under G.S. 105-282.1. 9
213+"§ 105-277.1H. Property tax relief portability. 10
214+(a) Purpose. – The purpose of this section is to ensure continuity in property tax relief for 11
215+new owners of a primary residence by allowing owners to transfer property tax relief to their new 12
216+primary residence. 13
217+(b) Definitions. – The definitions provided in G.S. 105-277.1 apply in this section. 14
218+(c) Portability. – An owner who qualifies for property tax relief may purchase a new 15
219+primary residence and, notwithstanding the durational residency requirements of 16
220+G.S. 105-277.1B, 105-277.1E, and 105-277.1G, may continue to qualify for property tax relief 17
221+provided the owner (i) continues to meet all other requirements for property tax relief and (ii) 18
222+files an application with the assessor of the county in which the new primary residence is situated 19
223+in accordance with subsection (d) of this section. 20
224+(d) Application Required. – In order to transfer property tax relief under this section, an 21
225+owner shall submit (i) an application in accordance with G.S. 105-282.1(a)(2)g. and (ii) any other 22
226+relevant documentation that an assessor deems necessary to verify an owner's qualifications for 23
227+property tax relief portability under this section." 24
228+SECTION 1.(d) G.S. 105-282.1(a)(2) reads as rewritten: 25
229+"(2) Single application required. – An owner of one or more of the following 26
230+properties eligible for a property tax benefit must file an application for the 27
231+benefit to receive it. Once the application has been approved, the owner does 28
232+not need to file an application in subsequent years unless new or additional 29
233+property is acquired or improvements are added or removed, necessitating a 30
234+change in the valuation of the property, or there is a change in the use of the 31
235+property or the qualifications or eligibility of the taxpayer necessitating a 32
236+review of the benefit. The properties are as follows: 33
237+a. (Effective for taxes imposed for taxable years beginning before 34
238+July 1, 2022) Property exempted from taxation under G.S. 105-278.3, 35
239+105-278.4, 105-278.5, 105-278.6, 105-278.7, or 105-278.8. 36
240+a. (Effective for taxes imposed for taxable years beginning on or 37
241+after July 1, 2022) Property exempted from taxation under 38
242+G.S. 105-278.2(a), 105-278.3, 105-278.4, 105-278.5, 105-278.6, 39
243+105-278.7, or 105-278.8. 40
244+b. Special classes of property excluded from taxation under 41
245+G.S. 105-275(3), (7), (8), (12), (17), (18), (19), (20), (21), (31e), (35), 42
246+(36), (38), (39), (41), (45), (46), (47), (48), or (49) or under 43
247+G.S. 131A-21. 44
248+c. (Effective for taxable years imposed for taxable years beginning 45
249+before July 1, 2019) Special classes of property classified for taxation 46
250+at a reduced valuation under G.S. 105-277(h), 105-277.1, 105-277.1C, 47
251+105-277.10, 105-277.13, 105-277.14, 105-277.15, 105-277.17, or 48
252+105-278. 49
253+c. (Effective for taxable years imposed for taxable years beginning 50
254+on or after July 1, 2019) Special classes of property classified for 51 General Assembly Of North Carolina Session 2025
255+Page 6 House Bill 432-First Edition
256+taxation at a reduced valuation under G.S. 105-277(h), 105-277.02, 1
257+105-277.1, 105-277.1C, 105-277.10, 105-277.13, 105-277.14, 2
258+105-277.15, 105-277.17, or 105-278. 3
259+d. Property owned by a nonprofit homeowners' association but where the 4
260+value of the property is included in the appraisals of property owned 5
261+by members of the association under G.S. 105-277.8. 6
262+e. Repealed by Session Laws 2008-35, s. 1.2, effective for taxes imposed 7
263+for taxable years beginning on or after July 1, 2008. 8
264+f. Special classes of property eligible for tax relief under 9
265+G.S. 105-277.1E. 10
266+g. Property that qualifies for property tax relief portability under 11
267+G.S. 105-277.1H." 12
268+SECTION 1.(e) G.S. 105-283 reads as rewritten: 13
269+"§ 105-283. Uniform appraisal standards. 14
270+All Except as provided in G.S. 105-277.1E, all property, real and personal, shall as far as 15
271+practicable be appraised or valued at its true value in money. When used in this Subchapter, the 16
272+words "true value" shall be interpreted as meaning market value, that is, the price estimated in 17
273+terms of money at which the property would change hands between a willing and financially able 18
274+buyer and a willing seller, neither being under any compulsion to buy or to sell and both having 19
275+reasonable knowledge of all the uses to which the property is adapted and for which it is capable 20
276+of being used. For the purposes of this section, the acquisition of an interest in land by an entity 21
277+having the power of eminent domain with respect to the interest acquired shall not be considered 22
278+competent evidence of the true value in money of comparable land." 23
279+SECTION 1.(f) G.S. 105-284 reads as rewritten: 24
280+"§ 105-284. Uniform assessment standard. 25
281+(a) Except as otherwise provided in G.S. 105-277.1E and in this section, all property, real 26
282+and personal, shall be assessed for taxation at its true value or use value as determined under 27
283+G.S. 105-283 or G.S. 105-277.6, and taxes levied by all counties and municipalities shall be 28
284+levied uniformly on assessments determined in accordance with this section. 29
285+…." 30
286+SECTION 1.(g) G.S. 105-309(f) reads as rewritten: 31
287+"(f) The assessor must print a homestead tax relief notice on each abstract or on an 32
288+information sheet distributed with the abstract. The abstract or sheet must include the address 33
289+and telephone number of the assessor below the notice required by this section. The notice must 34
290+be in the form required by the Department of Revenue designed to notify the taxpayer of his or 35
291+her rights and responsibilities under the homestead property tax exclusion provided in G.S. 36
292+105-277.1 and G.S. 105-277.1, the property tax homestead circuit breaker provided in G.S. 37
293+105-277.1B.G.S. 105-277.1B, the homeowner advantage property tax relief provided in 38
294+G.S. 105-277.1E, and the elderly property tax homestead circuit breaker provided in 39
295+G.S. 105-277.1G." 40
296+SECTION 2. Article 16 of Chapter 1C of the General Statutes is amended by adding 41
297+a new section to read: 42
298+"§ 1C-1605. Homestead exemption from forced sale. 43
299+(a) This section applies to real or personal property owned by a debtor that the debtor has 44
300+used as the debtor's primary residence for a period of at least 40 consecutive months from the 45
301+date of purchase of the property for claims in bankruptcy or 24 consecutive months from the date 46
302+of purchase of the property for all other claims. 47
303+(b) A judgment entered against the owner of property subject to this section may be 48
304+placed as a lien against the property, but the property is exempt from forced sale under Article 49
305+29B of Chapter 1 of the General Statutes or any other provision of State law. The lien may be 50
306+enforced any time ownership of the property is transferred. 51 General Assembly Of North Carolina Session 2025
307+House Bill 432-First Edition Page 7
308+(c) The exemption of subsection (b) of this section is inapplicable to claims: 1
309+(1) Of the United States or its agencies as provided by federal law. 2
310+(2) Of the State or its subdivisions for property taxes, appearance bonds, or 3
311+fiduciary bonds. 4
312+(3) Of lien by a laborer for work done and performed for the person claiming the 5
313+exemption, but only as to the specific property affected. 6
314+(4) Of lien by a mechanic for work done on the premises, but only as to the 7
315+specific property affected. 8
316+(5) For payment of obligations contracted for the purchase of the specific real 9
317+property affected. 10
318+(6) For payment of overdue obligations, fines, or assessments due to a 11
319+homeowners' association. 12
320+(7) Of a creditor for any debt if a judgment for the debt was entered against the 13
321+property owner prior to the twenty-fourth month of consecutive ownership." 14
322+SECTION 3. The Department of Revenue (Department) shall study ways to abolish 15
323+the statutory framework for the listing, appraisal, and assessment of real property under Chapter 16
324+105 of the General Statutes and shall develop a framework to eliminate property taxes on real 17
325+property in this State. The Department shall develop a framework to replace property tax 18
326+revenues through State and local budget reductions, sales-based consumption taxes, and locally 19
327+determined consumption taxes. The study must include, at a minimum, the following 20
328+information: 21
329+(1) An analysis of the potential impact of eliminating property taxes on public 22
330+services, including education, infrastructure, and emergency services. 23
331+(2) An assessment of potential housing market fluctuations, including changes in 24
332+homeownership rates and property values. 25
333+(3) An evaluation of whether a shift to consumption-based taxes would make 26
334+North Carolina more attractive to businesses compared to other states. 27
335+(4) An analysis of the potential impact of eliminating property taxes on overall 28
336+economic stability, consumer behavior, and long-term economic growth. 29
337+The Department may consult with any other relevant State, local, or private entity in 30
338+conducting the study required by this section. The Department shall report its findings to the Joint 31
339+Legislative Oversight Committee on General Government by February 1, 2026. 32
340+SECTION 4. Section 1 of this act is effective for taxes imposed for taxable years 33
341+beginning on or after July 1, 2026. Section 2 of this act is effective beginning October 1, 2025, 34
342+and applies to judgments entered against a debtor on or after that date. The remainder of this act 35
343+is effective when it becomes law. 36