MOAA Catawba Valley Chapter
(An affiliate of the Military Officers Association of America)
CURRENT LEGISLATION & ONGOING ISSUES
Summaries of NC bills HB 118 & SB 109
This is MOAA NC's top priority for 2025
Bill H 118 (2025-2026)
Summary date: Feb 13 2025
Under current law, the property tax homestead exclusion for disabled veterans, set at the first $45,000 of appraised value of the residence, is excluded from taxation. Revises the property tax homestead exclusion for disabled veterans under GS 105-277.1C, so that the value of the exclusion is set as follows for the following claimants:
o Disabled veteran exclusion. – For a disabled veteran, the exclusion amount is the product of (i) the appraised value of the residence and (ii) the percentage of the qualifying owner's disability rating, as determined by the United States Department of Veterans Affairs.
o Surviving spouse exclusion. – For the surviving spouse of a disabled veteran, the exclusion amount is equal to the greater of (i) the amount excluded under the disabled veteran exclusion explained above as of the date of the disabled veteran's death or (ii) the first $45,000 of appraised value of the permanent residence, provided that the applicant establishes eligibility for such exclusion by providing certification from the United States Department of Veterans Affairs that, as of January 1 preceding the taxable year for which the exclusion is claimed, the veteran's death was the result of a service-connected condition. (Current law allows a surviving spouse to provide such certification from another federal agency as well.) Makes conforming changes to the definition of disabled veteran.
Streamlines the disability component of the definition of disabled veteran so that a veteran only has to show that they have been assigned a disability rating of 50% or greater for service-connected disability by certification from the US Department of Veterans Affairs. (Currently, veteran can establish entitlement to homestead exemption as a qualifying veteran under the statute by either (1) establishing permanent and total service connected disability by the VA or (2) establishing receipt of adaptive housing under 38 USC 2101 due to blindness or other permanent and total disabilities). Makes organizational and conforming changes. Effective for taxes imposed for taxable years beginning on or after July 1, 2025.
A BILL (SB 109) TO BE ENTITLED
AN ACT TO INCREASE THE PROPERTY TAX HOMESTEAD EXCLUSION AMOUNT
FOR DISABLED VETERANS TO ALLOW FOR THE EXCLUSION OF APPRECIATION
OF THE APPRAISED VALUE OF THE PERMANENT RESIDENCE ATTRIBUTABLE
TO HOUSING GRANT FUNDING FROM THE UNITED STATES DEPARTMENT OF
VETERANS AFFAIRS AND TO ALLOW DISABLED VETERANS TO PREQUALIFY
FOR THE DISABLED VETERAN PROPERTY TAX HOMESTEAD EXCLUSION.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 105-277.1C reads as rewritten:
"§ 105-277.1C. Disabled veteran property tax homestead exclusion.
(a) Classification. – A permanent residence owned and occupied by a qualifying owner
is designated a special class of property under Article V, Section 2(2) of the North Carolina
Constitution and is taxable in accordance with this section. The amount excluded from taxation
is the first forty-five thousand dollars ($45,000) of appraised value of the residence is excluded
from taxation. plus any portion of the appraised value of the residence attributable to adaptations
for the qualifying owner's medical needs if the adaptations were funded by a housing grant from
the United States Department of Veterans Affairs for one or more service-connected disabilities.
A qualifying owner who receives an exclusion under this section may not receive other property
tax relief.
…
(f) Application. – An application for the exclusion allowed under this section should be
filed during the regular listing period, but may be filed and must be accepted at any time up to
and through June 1 preceding the tax year for which the exclusion is claimed. An applicant for
an exclusion under this section must establish eligibility for the exclusion by providing a copy of
the veteran's disability certification or evidence of benefits received under 38 U.S.C. § 2101. An
applicant who has prequalified pursuant to subsection (g) of this section may provide a copy of
the prequalification notice provided by the assessor under subsection (g) of this section to
establish eligibility for the exclusion provided in this section in lieu of a veteran's disability
certification or evidence of benefits received under 38 U.S.C. § 2101.
(g) Prequalification. – A disabled veteran may apply for prequalification of the property
tax relief provided by this section notwithstanding that the veteran is not an owner of a permanent
residence at the time that the veteran's application for prequalification is submitted. It is the intent
of the General Assembly to allow taxpayers and lenders to determine, in advance of the purchase
of a primary residence, the availability of the tax benefit provided by this section in order to
facilitate omitting exempted amounts from determinations of payment calculations. An
application for prequalification under this subsection may be filed at any time and must be
submitted on a form approved by the Department. Application forms under this subsection must
be made available by the assessor. Upon receipt of an application under this subsection, the
assessor of the county in which the application is filed must notify the applicant of the applicant's
qualification for eligibility for property tax relief under this section within 30 days. Upon
purchasing a permanent residence, an applicant who has received prequalification under this
subsection must apply for the property tax relief provided by this section as required under
subsection (f) of this section."
SECTION 2. This act is effective for taxes imposed for taxable years beginning on
or after July 1, 2025