North Carolina Governor Cooper recently signed into law a bill which should help homebuilders with some of their property tax burden. House Bill 492, known as the Simplify Builder Inventory Exclusion, will eliminate the need for a builder to file annually in order to take advantage of an important property tax exclusion.
The new law permits a builder to file a one-time application to claim an exemption from higher property taxes on land and houses held for sale by a builder to the extent that the tax increase is attributable to subdivision of the property or improvements made such as the installation of infrastructure or the construction of a single-family or duplex house on the property.
HB 492 improves upon the 2015 legislation known as House Bill 168 (Exempt Builders’ Inventory). That legislation required annual filing before the end of January for the following tax year.
The exclusion for improvements to residential property is available for up to three years as long as the property remains for sale in the builder’s inventory. A similar exclusion for land improved for commercial purposes lasts for up to five years but ends for the improved parcel when it is sold or when a commercial building is constructed. Please contact our office if you have any questions about this new law.