North Carolina lawmakers want to take property tax cap to state voters
AI-generated summary reviewed by our newsroom.
- Senate leader plans bill to pause property tax revaluations for a year.
- Legislative analyses show exemptions cut local revenue by $1.7B+ annually.
- House proposes amendment to let voters decide on property tax caps.
Voters may get to decide if North Carolina puts a cap on local property tax increases, if a state House proposal gains traction.
Republican Rep. Erin Paré of Wake County said a constitutional amendment would mean that voters tell lawmakers what they want them to do.
If the House plan comes to fruition, it could be on voters’ ballots in November. The ballot measure would instruct the General Assembly to pass “laws limiting the amount by which the levy of taxes on property may increase,” according to the bill draft, but lawmakers have not settled on an amount.
“We really owe people a sense of predictability of what they’re looking at, in terms of their ... budgets,” Paré, a co-chair, said, so homeowners aren’t surprised by tax hikes.
A constitutional amendment has received some bipartisan support on the committee.
Rep. Becky Carney, a Mecklenburg County Democrat, said she has a feeling that the property tax debate is going to last more than a year. She added that she agrees the state should do something about property taxes.
Carney said that she doesn’t normally support constitutional amendments, but does support advancing this one so the public can weigh in.
“We’re going to let the public have an input on whether we should do this or not,” Carney said. “You either tell us you want ... a cap, or you don’t.”
House members have been looking at property taxes for the past few months, since House Speaker Destin Hall made it a priority for 2026, which was first reported by The News & Observer.
Eliminating property taxes, which cities and counties use to pay for police, schools and infrastructure, isn’t on the table.
Republican Rep. John Blust said that eliminating property tax would probably be impossible because “the money’s got to come from somewhere, and somebody’s going to holler, whatever you ask.”
Tax exemption changes for hospitals, affordable housing proposed
It’s not just caps that the lawmakers are considering. There are also other bill drafts looking at putting new limits on property tax exemptions for affordable housing and nonprofit hospitals.
The legislature’s fiscal research and legislative analysis divisions found that more than $1.7 billion in local revenue to cities and counties is lost each year because of five major tax exemptions:
- $1.1 billion for governmental exemptions,
- $255 million for religious exemptions,
- $180 million for nongovernmental education exemptions,
- $130 million in nonprofit hospital property exemptions and
- $60 million in exemptions for charitable nonprofit low and moderate income housing.
Howard noted that hospitals may not like the proposal to limit their exemptions.
“It’s a testy situation to be in, but we’re doing the very best that we can with the time frame and what we’re hoping to accomplish,” said Republican Rep. Julia Howard, a longtime House member and co-chair of the committee.
She said the bill draft for the constitutional amendment was written based on feedback from the public and lawmakers.
“People are losing their property, with no fault of their own,” she said, referring to residents priced out of affording property taxes because they don’t have the money to pay for increases added by their local governments.
There are some hurdles ahead, from narrowing down exactly what House members want to ask voters about property taxes, which they’ll do at their next meeting, to the Senate getting involved.
Senate Republicans’ view of property tax changes
“With or without them, we will move forward, because it’s the right thing to do,” Howard said about the Senate, which does not have a property tax committee. Senate leader Phil Berger has named senators to study the issue, and Howard hopes the House’s committee becomes a joint committee with the Senate. Republicans control both chambers.
“I don’t think it’s any question that it’s an issue that will be much discussed when we get back in the short session. Whether or not there’s a solution or a proposal that folks can coalesce around, that we can garner the votes for — it’s a little too early to tell at this point,” Berger told The N&O in late February.
Berger also announced recently that he plans to sponsor a bill in the short session to stop all property tax revaluation changes for a year, to give the General Assembly time to pass property tax reform.
The legislature’s short session starts April 21.
