Section 1.

Amends GS 105-277.1 to allow 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 limit determined under GS 105-277.1(a2).

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).

Effective for taxable years beginning on or after July 1, 2027.

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. 

Section 3.

Appropriates $20 million for 2026-27 from the General Fund to the NC Association of County Commissioners for grants to local governments to transition those local governments to shortened reappraisal cycles and to educate the public on property taxes and property tax relief programs offered by the State. Sets out allowable uses of the grant funds. Requires prioritizing grant awards to local governments operating on a reappraisal cycle of more than four years. Effective July 1, 2026.

Section 4.

Adds new Article 8F, Excise Tax on Controlling Interest Transfers, in GS Chapter 105, providing as follows.

Sets out the purpose and scope of the tax. Defines controlling interest as either: (1) in the case of a corporation, either more than 50% of the total combined voting power of all classes of stock of such corporation, or more than 50% of the capital, profits, or beneficial interest in the voting stock of such corporation or (2) in the case of a partnership, association, trust, or other entity, more than 50% of the capital, profits, or beneficial interest in such partnership, association, trust, or other entity. Sets out other defined terms.

Imposes an excise tax on the sale or transfer, by one or more persons or by one or more transactions, within any 36-month period, of a controlling interest in an entity that possesses a real property interest in the state when the property’s interest exceeds $100. Sets the tax rate at $1 on each $500, or fractional part thereof, of the value of the real property interest. Sets out reporting, payment, and payment recording requirements.

Exempts from the tax: (1) transfers of an interest in an entity that is traded on a public stock exchange; (2) transfers resulting from death, whether by will or statutory succession; (3) transfers between spouses; and (4) transfers that are exempt under GS 105-228.29 (setting out exemptions from the tax due by a person conveying an interest in real estate located in North Carolina other than a governmental unit or an instrumentality of a governmental unit) except transfers by "merger" under that statute.

Sets out penalties for failure to file and makes it a Class 1 misdemeanor to willfully provide false information on the value of the property or the percentage of interest.

Applies to transfers occurring on or after January 1, 2027.

Section 5.

Except as otherwise provided, effective July 1, 2027.