House committee substitute to the 1st edition makes the following changes.

Section 1.

Removes provisions allowing persons with an income for the preceding calendar year of not more than 80% of the applicable area median income (defined) for a household of two persons in the county in which the property is so long as the owner has owned and occupied the property as a permanent residence for the previous 15 consecutive years as an additional income ground for eligibility for the elderly or disabled property tax homestead exemption under GS 105-277.1.  Instead, allows married applicants residing with their spouses to qualify for the property tax homestead exclusion provided in GS 105-277.1 if their income does not exceed 115% of the income eligibility limited determined under GS 105-277.1(a2).

Adds the following. Sets an area median income (AMI) limit of 70% under GS 105-277.1B (property tax homestead circuit breaker) for a household of two persons in the county in which the property is located, as determined by the most recent figure reported by the United States Department of Housing and Urban Development as of January 1 preceding the taxable year for which the benefit is claimed. Deems the tax limitation in GS 105-277.1B(f) a general tax limitation for a qualifying owner that has owned the property as a permanent resident for at least five consecutive years and has occupied the property for at least five years.

Removes provisions pertaining to deferred taxes, gaps in deferral, creditor limitations, and construction of GS 105-277.1B. Creates an alternate tax limitation for a qualifying owner that has owned the property as a permanent residence for at least 10 consecutive years and has occupied the property as a permanent residence for at least 10 years relieving that person of the portion of the principal amount of tax that is imposed for the current tax year on his or her permanent residence and exceeds the percentage of the qualifying owner's income set out in the table in the act. Provides for apportionment if a permanent residence is subject to tax by more than one taxing unit and the total tax liability exceeds the tax limit imposed by this statute. Specifies that a property receiving the benefit under GS 105-277.1B loses its eligibility for the benefit as a result of a disqualifying event. Describes how to compute the tax if a disqualifying event occurs. Removes reference to “tax deferred” in provision specifying construction of GS 105-277.1B. Makes conforming changes.

Now requires a property owner eligible for the circuit breaker under GS 105-277.1B to file an application for the benefit triennially under GS 105-282.1.

Repeals GS 105-277.1F(a)(2) (applying the section to GS 105-277.1B) and GS 105-365.1(a)(3)(setting a date of delinquency for a deferred tax under GS 105-227.1B).

Removes authorization to disclose the amount of property taxes deferred on a property tax receipt under GS 153A-148. (county employees) and GS 160A-208.1 (city employees).

Section 2.

Notwithstanding GS 105-380 and GS 105-381, directs the governing body of a taxing unit to release the unpaid deferred taxes under GS 105-277.1B on any property for which a disqualifying event has not occurred. Specifies that any lien under GS 105-355(a) corresponding to the released deferred taxes is also extinguished. Effective July 1, 2026.