GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2009
SESSION LAW 2010-140
HOUSE BILL 1249
AN ACT to modify the inventory property tax deferral.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 105-277.1D reads as rewritten:
"§ 105-277.1D. Inventory property tax deferral.
(a) Classification.
- A residence owned and constructed by a builder and owned by the
builder or a business entity of which the builder is a member, as defined in
G.S. 105-277.2, is designated a special class of property under
Section 2(2) of Article V of the North Carolina Constitution and is taxable in
accordance with this section. For purposes of this section, a
"residence" is an improvement, other than remodeling, renovating,
rehabilitating, or refinishing, by a builder to real property that is intended
to be sold and used as an individual's residence, that is unoccupied, and for
which a certificate of occupancy authorized by law has been issued.
(b) Deferred Taxes.
- A builderAn owner may defer the portion of tax imposed on real
property that represents the increase in value of the property attributable
solely to improvements resulting from the construction by the builder of a
residence on the property. The difference between the taxes due under this
section and the taxes that would have been payable in the absence of this
section are a lien on the real property of the taxpayer as provided in
G.S. 105-355(a). The difference in taxes for the fiscal years preceding
the current tax year shall be carried forward in the records of the taxing unit
or units as deferred taxes. The deferred taxes are due and payable in
accordance with G.S. 105-277.1F when the property loses its eligibility
for deferral because of the occurrence of a disqualifying event. A disqualifying
event occurs at the earliest of (i) when the builder owner transfers
the residence, (ii) when the residence is occupied by the builder owner
or by someone other than the builder owner with the builder's
owner's consent, (iii) five years from the time the improved
property was first subject to being listed for taxation by the builder,owner,
or (iv) three years from the time the improved property first received the
property tax benefit provided by this section. On or before September 1 of each
year, the collector shall notify each builder owner to whom a tax
deferral has previously been granted of the accumulated sum of deferred taxes
and interest.
(c) Creditor
Limitations. - A mortgagee or trustee that elects to pay any tax deferred by
the builder owner subject to a mortgage or deed of trust does not
acquire a right to foreclose as a result of the election. Except for
requirements dictated by federal law or regulation, any provision in a
mortgage, deed of trust, or other agreement that prohibits the builder owner
from deferring taxes on property under this section is void.
(d) Construction. - This section does not affect the attachment of a lien for personal property taxes against a tax-deferred residence.
(e) Application. - An application for property tax relief provided by this section should be filed during the regular listing period but may be filed after the regular listing period upon a showing of good cause by the applicant for failure to make a timely application, as determined and approved by the board of equalization and review or, if that board is not in session, by the board of county commissioners. An untimely application approved under this subsection applies only to property taxes levied by the county or municipality in the calendar year in which the untimely application is filed. Decisions of the county board may be appealed to the Property Tax Commission. Persons may apply for this property tax relief by entering the appropriate information on a form made available by the assessor under G.S. 105-282.1."
SECTION 2. This act is effective for taxes imposed for taxable years beginning on or after July 1, 2010.
In the General Assembly read three times and ratified this the 8th day of July, 2010.
s/ Walter H. Dalton
President of the Senate
s/ Joe Hackney
Speaker of the House of Representatives
s/ Beverly E. Perdue
Governor
Approved 1:42 p.m. this 22nd day of July, 2010