Calculating North Carolina Property Taxes Flashcards
Ad valorem taxes are…
property taxes
the tax rate is…
The percentage of the property’s value that will be paid in tax
the tax base is…
total taxable assets available in that area
full vs. partial assessment
The whole property is taxed
only a part of It is taxed
In NC, do we use full or partial assessment for taxes?
full
______ gives the General Assembly the power to classify property for taxation statewide.
The North Carolina Constitution (Article V, Section 2)
Who administers and collects property taxes?
the counties
Who creates the rules for taxation in a state?
the general assembly
______Act is where you’ll find all of the rules and regulations for listing, assessing, and taxing personal and real property in North Carolina.
North Carolina Machinery
How do municipalities determine how much ad valorem taxes to charge?
Municipalities decide on their tax rates during their budget planning. They figure out how much money they need from property taxes to fund their yearly budget. Then, they consider the total value of all properties in the area (tax base) and calculate a tax rate that will generate the required funds. This process involves more complexities due to regulations, but that’s the basic concept.
NC’s start of fiscal year
July 1
What is a fiscal year?
A fiscal year is a 12-month period used by organizations for financial planning and reporting, which doesn’t necessarily start in January.
Tax rate must be established no later than _____
July 1
What does “$100 per assessed value mean”?
It is just the tax rate. it’s the same thing as percentages.
What is the formula for finding out the amount of property taxes for each year?
M2L
MULTIPLY
Convert the per hundred amount to a decimal by moving the decimal point two places to the left, and then multiply the house price by that decimal. voila’
A mill is…
1⁄1000 of a dollar, or $0.001 ($1 in tax per $1,000 in value)
The mill rate is…
The mills per dollar
Does North Carolina use mills?
No
How to solve the amount of property taxes per year using mills (hint: there are three zeroes in a mill)
M3L
MULTIPLY
-Convert whole number mills to percent by dividing by 1000
-then multiply that decimal by the house price
How to convert percentage tax rate to mils
M1R
Move the decimal once to the right.
How to solve the amount of property taxes when partial assessment is involved
% ——–> M2R
MULTIPLY HOUSE
MULTIPLY DECI TAX
-First, you make the partial assessment percentage into a decimal by moving two places to the right
-Multiply that decimal by the house price
-Multiply that answer by the decimal version of the tax rate (you moved the decimal point twice to the left, remember?)
The tax on personal property mostly pertains to…
Business property or big items like boats, aircraft, unregistered vehicles, jet skis, and manufactured homes that are not considered real property.
Exemptions to NC’s ad valorem taxation: (3)
Household goods: Like we just talked about, household goods aren’t taxed.
Churches and nonprofits: Churches, nonprofits, and certain conservation or historical properties don’t have to pay property taxes (or any taxes!)
Intangibles: Businesses do not have to pay taxes on intangible items like patents.
Tax relief programs are available for people who meet specific qualifications: (3)
Homestead: A tax relief program for people 65+ or permanently disabled who make less than $31,500 jointly (in 2020).
Veteran with disability: Veterans with disabilities or the surviving spouses of deceased veterans qualify for some tax relief.
Circuit breaker: This program is for people 65+ or permanently disabled who have lived in a property for more than five years and make less than $47,250.
People who qualify for these tax break programs must apply by ______ of the year they want the tax break.
June 1
All taxable property must be listed in _______ of every year.
January
In North Carolina, properties undergo an _____ reappraisal every _____ year, where their values are reevaluated for tax purposes.
octennial
eight years
Horizontal reappraisal is…
When every property assessment in an area is raised or lowered, the same percentage is based on market changes instead of being individually reassessed.
Normally, properties are reappraised every ____ years, unless a board of county commissioners has adopted a more frequent reappraisal cycle (every ______ years).
8
4
How often is personal property reappraised in North Carolina?
Personal property is reappraised every year in NC.
What Doesn’t Cause Reappraisal?
Depreciation, general economic changes, or minor “betterments” like painting and landscaping.
_____ changes or improvements can lead to reappraisal.
Major/permanent
A taxpayer may appeal the decision of the county assessor to the _____
County Board of Equalization
If a homeowner is unsatisfied with the result from the county Board of Equalization, they can appeal the decision to the _____
State Property Tax Commission
A property owner can also skip the appeal and present their evidence directly to the _____
County tax supervisor.
Involuntary Liens definition
They are typically imposed by law or a court order. Involuntary liens are usually related to debts or obligations, such as unpaid taxes or court-ordered judgments.
_____: lien is placed
______: real property listing is due
______: taxes are due
_______: the last day to pay the previous year’s taxes without penalty
January 1
January 31
September 1
January 5
Different ways to divide the special assessment bill: (3)
“Front feet”: Owners pay based on the length of their property facing the street.
Acreage: Payment depends on the entire property size.
Property value: Those with more valuable properties pay more.
The aim is fair distribution so those gaining the most benefit pay proportionally more.
A county can’t impose a special assessment on the residents of a city unless…
The city’s governing board has approved the project.
Held in abeyance means…
A homeowner who owes an assessment bill might be allowed to hold off paying until the project is done and directly benefitting the homeowner.
Property owners who owe special assessments have to pay them within ___ days of the _____ getting filed with the county unless the board of commissioners okays paying it in installments.
30
assignment roll
A person has _____ days after the assessment roll is confirmed to file an appeal and ____- days to serve the county or city with their reasons for the appeal.
10
20
If a property owner fails to pay a special assessment, a special assessment lien will be put on their property. This is a _____ and ____ transfer with the property
specific lien
WILL
Special assessment liens are junior to any state, local, or federal _____ liens but senior to any other liens.
tax
Homeowners only need to update their real property listing if they have what?
New improvements to the property or new, separate rights to the property
The priority list of liens?
ad valorem tax liens
special assessment liens
“First come, first serve buddy”
The only people who pay special assessment bills are…
The people who directly benefit from them.
