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North Carolina Amends Laws on Property Tax Refunds and Underpayments

by Kevin Baker, Atlanta, November 2015


A North Carolina law that went into effect October 1, 2015 makes changes for property taxes overpaid and underpaid. It requires interest be paid on refunds and gives assurances that owners are not responsible for back taxes before they purchased the property.


Tax Refunds


Senate Bill 159 requires that property owners be paid interest at a rate of 5% per year when their successful appeal proves they have overpaid their taxes.


The legislation also allows taxing units to avoid mailing a refund if the amount is less than $15.00. In these cases, the taxpayer can either request the minimal refund in person before the end of the fiscal year. Or the tax jurisdiction will implement a system to apply the minimal refund as a credit for next year's taxes.


Tax Underpayments


Additional taxes levied on property that was found to be under assessed will be due and payable on September 1 of the fiscal year. If the total of additional taxes is more $1,000, taxpayers have the option to make payments in monthly installments for up to three years. Interest will not accrue for the period the taxpayer makes timely payments under a payment plan.


Under the new law, the county cannot force the current owner to pay back taxes on the property for years they did not own it. Also, the county cannot put a lien on the property for back taxes owed by a previous owner.