Property taxes are the primary way North Carolina counties, cities and towns fund services, such as police protection and garbage pickup. While municipalities have many sources of revenue, property tax far outweighs the rest.
For example, in the fiscal year 2008, Wake County expected to receive more than $551 million from property taxes. That projection was 3 1/2 times more than the next highest revenue source, sales taxes (projected to bring in more than $157 million).
Home owners pay property taxes directly to the county's tax office. Renters technically do not pay for a tax on their home. However, most landlords will factor in property taxes when they set a rent.
Counties also require residents to pay property tax on vehicles. When a vehicle is registered or renewed with the state Department of Motor Vehicles, the owner's home county is notified and a tax bill is sent. Failure to pay a tax bill for a vehicle could lead to interest charges. Counties also have the authority to block the registration or renewal for accounts that are at least four months overdue.
How much you pay in in property taxes is based on two factors: The tax rate and the assessed value of the property. That formula ensures that, at least in principle, those who can afford more pay more in property taxes.
The tax rate is set by the county commission when it adopts a budget. As Durham County explains it: "The tax monies collected for the districts pay for schools, roads, police and fire protection, along with the other services that a taxpayer demands." People who live within a city or town also pay property tax to that government.
Assessed value is the second part of the property tax equation. This one is a little more complicated. In every county, the county is responsible for determining the value of a piece of property. The value will almost certainly be less than the actual market or sale value of the property since property almost always increases in value over time and property values are reassessed only periodically.
Counties provide ways to appeal assesments.
Triangle counties provide online searches so anyone can determine the assessed value of a parcel. You can search by address or by last name if you know who owns the property.
How much will I have to pay?
Wake County explains how to calculate your tax bill.
Tax rates are calculated against each $100 in value. Example 1: A single-family home with a value of $200,000. The property is located in the Town of Apex but not a Fire or Special District.
Wake County rate = .678 Town of Apex rate = .40 Combined Rate = 1.078 Recycling Fee = $20.00
- Property value divided by 100: $200,000/100 = 2000
- 2000 x 1.078 = $2,156.00
- Plus $20.00 Recycling fee = $2,176.00 estimated annual tax
Example 2: A licensed motor vehicle with a value of $8,500. The property is not located in a municipality but is in a Fire District.
Wake County rate = .678 Fire District rate = .10 Combined Rate = .778 (No vehicle fee is charged if the property is not in a municipality)
- Property value divided by 100: $8,500/100 = $85
- $85 x .778 = $66.13 estimated annual tax