INCENT DEVELOPMENT FINANCE DISTRICT FUNDING.

Printer-friendly: Click to view
View NCGA Bill Details(link is external)2025-2026 Session
Senate Bill 695 (Public) Filed Tuesday, March 25, 2025
AN ACT TO GROW THE PROPERTY TAX BASE OF UNITS OF LOCAL GOVERNMENT BY FACILITATING PRIVATE DEVELOPER INVOLVEMENT IN CERTAIN PROJECT DEVELOPMENTS.
Intro. by Lazzara, Johnson.

Status: Re-ref Com On Finance (Senate action) (May 22 2025)
S 695

Bill Summaries:

  • Summary date: May 22 2025 - View Summary

    Senate committee substitute rewrites the 1st edition as follows.

    Instead of re-enacting GS 105-277.1D (inventory property tax deferral), enacts GS 105-277.03, pertaining to incentive district property tax exclusions. Specifies that a qualified development (land and unoccupied improvement by a builder to the land, other than remodeling, renovating, rehabilitating, or refinishing existing structures or buildings): (1) located in an incentive district (defined) and (2) held for sale by a builder, is designated a special class of property as described, and is taxable as follows. Excludes 90% of the appraised value of property from taxation. Specifies that property receiving an exclusion under GS 105-277.1D may not receive property tax relief under GS 105-277.02 (reduced taxation valuation of certain real property held for sale). Ends the exclusion on the earlier of: (1) ten years from the time the property first received the property tax benefit or (2) the sale of the property. Requires the builder to first apply for the exclusion as described. Makes conforming changes to GS 105-277.02 and GS 105-282.1. Effective for taxable years beginning on or after July 1, 2026.


  • Summary date: Apr 1 2025 - View Summary

    Reenacts GS 105-277.1D (Inventory property tax deferral) and make the following changes. Defines “incentive district” as areas approved by local governments for project development financing debt instruments under GS 159-103, and “qualified improvement” as improvements to real property other than remodeling or renovating that are constructed in incentive districts. Limits an incentive district to no more than 5% of the local government unit's total area. Designates as a special class of property, a qualified improvement: (1) constructed by a builder and owned by the builder or a business entity that the builder is a member of, (2) located in an incentive district, (3) used for a purpose under GS 159-103 (those for which a local government may issue project development financing debt instruments). Allows builders to defer the increase in property taxes due to a qualified improvement until a certificate of occupancy is issued for the improvement. 

    Effective and applicable to taxes imposed for tax years beginning on or after July 1, 2025.