Since the pandemic, North Carolina home values have skyrocketed by 67.1 percent, creating concern among homeowners about the affordability of their property tax bills.  Individuals on fixed incomes, such as the elderly and disabled, are particularly burdened by higher property taxes.  

Fittingly, North Carolina has property tax relief programs that help low-income seniors and the disabled. Also, this session, legislators have put forth multiple bills to expand the property tax relief programs. The remainder of this article will explain the current property tax relief programs, provide instructions on how to apply for them, and highlight the newly proposed property tax relief bills.

Property tax relief programs

The Homestead Exclusion program provides homeowners a reduction in the appraised property value of their home by the greater of $25,000 or 50 percent. The program has a one-time application that automatically reenrolls accepted applicants each year and the following eligibility requirements:

  • The applicant must be a North Carolina resident
  • The applicant must be at least 65 years old or permanently disabled
  • The applicant must have a household income that does not exceed $37,900
  • The property is the applicant’s permanent residence (and no greater than one acre)
  • The applicant’s name must be on the residence’s deed as of January 1st

The Circuit Breaker Deferment program allows homeowners to limit their property tax bill to 4 to 5 percent of their income; anything above this amount is deferred (see below). The program has an annual application that must be filed each year and the following eligibility requirements:

  • The applicant must be a North Carolina resident
  • The applicant must be at least 65 years old or permanently disabled
  • The applicant must have a household income that does not exceed $56,850
  • The property is the applicant’s permanent residence
  • The applicant has owned and occupied the property for at least five years

Upon selling the property, replacing it as your permanent residence, or passing away (unless transferred to a co-owner or spouse), the latest three years of deferred property taxes are due (with interest). The deferred taxes also become a lien on the property.

Which is better?

For an overwhelming majority of applicants who qualify for the Homestead Exclusion and the Circuit Breaker Deferment, the Homestead Exclusion provides greater tax relief. However, if someone has a very low income-to-property value ratio, the Circuit Breaker Deferment might provide more tax relief than the Homestead Exclusion.

Also, the longer someone is in the Circuit Breaker Deferment program, the greater the cumulative tax relief (recall that only three years of deferred taxes are due at the time of sale). So, applicants with longer time horizons might want to consider the Circuit Breaker Deferment program.

How to apply

Conveniently, the same application form is used for the Homestead Exclusion and the Circuit Breaker Deferment programs (the same form is also used to apply for the Disabled Veteran Exclusion program). While you can apply for multiple programs simultaneously, you can only be enrolled in one of the programs at a time. To apply, the application must be submitted to the county tax assessor where your property is located by June 1st. Those qualifying through disability instead of age must also certify their disability by submitting this form.

New property tax relief bills

In the 2025 legislative session, the following bills have been introduced that would alter the Homestead Exclusion and/or the Circuit Breaker Deferment programs:

  • SB 135 and SB 230 would increase the income limit for the Homestead Exclusion from $37,900 to $48,000.
  • HB 59 would increase the income limit for the Homestead Exclusion from $37,900 to $48,000 and create an alternative income eligibility requirement based on 80 percent of the median income in the property’s location.
  • SB 349 would increase the income limits for married couples in the Homestead Exclusion and the Circuit Breaker Deferment programs by 15 percent. Moreover, the bill would eliminate taxes above the Circuit Breaker Deferment limit instead of deferring them.

Conclusion

Elderly or disabled North Carolinians may qualify for property tax relief through the Homestead Exclusion and/or Circuit Breaker Deferment programs. For most people who qualify for both programs, accepting the 50 percent reduction in the appraised value of their home through the Homestead Exclusion will provide the better option. Those who wish to apply for either or both programs must submit their application to the county tax assessor where their property is located by June 1st.