County boards of commissioners and city councils can raise or lower property tax rates in North Carolina, but they can only raise property taxes for specific purposes designated by the North Carolina General Assembly. Typically, property tax revenue goes to the local government’s General Fund for a range of public services.
Property taxes have long been used to fund education in other states, and a growing number of cities and states across the country allocate a portion of these funds to early education. Within the area of community development programs and activities, child care, health, and education are listed explicitly.
North Carolina has low property tax rates compared to most of the United States. Changes in property values due to economic changes — such as the Great Recession — can affect the level of revenue raised from local property taxes, which 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 fixed in one location like a home or other building. Personal property refers to an asset that is moveable, such as a vehicle or boat.
The tax is based on the assessed value of the property, which is updated periodically. In North Carolina, counties conduct must conduct assessments or re-valuations of real property at least every eight years, but many currently conduct assessments every four years. The rates are presented per $100 in value. For example, Alamance County’s property tax rate is $0.66 per $100 in value.
Non-profits, governments, and certain academic and religious properties are exempt from paying property taxes.
Who Collects it?
Local governments collect their own property taxes, but some contract with other entities to collect property taxes on their behalf.
Municipalities often contract with their county to collect the tax with the help of the county assessor and tax collectors.
What is it Used for Now?
Property tax is the single largest source of revenue for local governments, and it is spent on a wide variety of local goods and services.
Nationwide about 30 percent of local government revenues come from property taxes.