North Carolina’s Elderly/Disabled Homestead Exemption

North_Carolina_State_FlagI’m often asked if North Carolina offers our elderly or disabled citizens tax breaks on property taxes, here are two progarams that might benifit those of us who qualify.

The elderly/disabled homestead exemption is for North Carolina residents who are at least 65 years of age or older on January 1 of the listing year or those that are totally and permanently disabled regardless of age. The income of the homeowner (including spouse if married) must not exceed $25,600.

Income is based on preceding calendar year. Income is defined as all moneys received from every source other than gifts or inheritances from family members. Income does include money received from social security, disability, retirement, interest, dividends and rental income etc. The income limit is subject to change by the North Carolina Department of Revenue, due to annual cost-of-living adjustments.

This program excludes from taxes the greater of $25,000 or 50% off the assessed value of the permanent residence including up to 1 acre of land. Manufactured homes may qualify regardless of whether the structure is listed as personal property or real property.

There is a one time application for the elderly/disabled exemption that must be filed by June 1. Persons filing under disability must provide a certification of total & permanent disability from a licensed physician or governmental agency. You must notify the tax office of any changes in income or ownership that could affect your eligibility.

Circuit Breaker — Elderly/Disabled Deferment Program

This program is provided to assist the elderly and disabled who may not qualify under the elderly/disabled program because of income limits. The deferment program limits the amount of taxes one must pay annually on their permanent residence to a fixed percentage of their income. The amount of taxes above that fixed percentage is deferred. Only the most current 3 years of taxes will have to be paid at the time of a disqualifying event. Examples of a disqualifying event would be death of property owner; transfer of the property or the property is no longer the taxpayer’s permanent residence. Deferred taxes that become due must be repaid including interest from the date the taxes would have originally become due.

To qualify:

Must be at least 65 years of age or totally and permanent disabled.
The income of the homeowner including spouse must not exceed $38,400.
You must have lived in the home for the past 5 years as your permanent residence.
An application must be filed with the tax office by June 1, 2009. An application is required to be filed each year by June 1 if you wish to remain in the program.

Tax limitation for 2009 (includes all districts & city taxes)

Income = $0 to $25,600 Taxes are limited to 4% of annual income.
Income = $25,601 to $38,400 Taxes are limited to 5% of annual income.
Income = Over $38,400 Does not qualify.

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