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Builder Inventory Tax Exemption Deadline
January 31
Builders & Developers
Don’t leave your money on the table! Apply for this exemption by January 31.
If you are holding in inventory for sale a single-family home, a townhouse, a duplex or land which you have improved for residential or commercial purposes, you are eligible to have the value of these improvements exempted from local property taxes for the next year. This exclusion, which can last up to three years if the house or land continues to be held for sale, also applies to single-family, townhouse and duplex houses under construction or land currently being developed.
NCHBA successfully amended this law in 2021 to specifically include townhouses in this exemption. This action overrules a Department of Revenue opinion to the contrary which local governments had followed and restores the original legislative intent that townhouses be included.
Formerly, a builder was required to file for this exemption every January in the tax office where the property is located. However, in 2019 NCHBA successfully sought an amendment to the law applicable to the 2020 tax year and beyond, so that builders need only apply once to obtain the three-year exclusion.
So, anyone successfully applying for the exclusion in year one would not need to reapply in years two or three assuming the house or land continues to be held for sale. However, it would be wise to check with your local county tax office to make sure they are correctly applying the exclusion for the current tax year.
For qualifying property newly improved, an application is due by January 31 in the tax office where the property is located. If you failed to take advantage of this exclusion in year one, you can still file for an exclusion for tax years two and/or three.
For more information and details on this law, click this link
Don’t leave your money on the table! Apply for this exemption by January 31.
FOR MORE INFORMATION CONTACT:
Mike Carpenter, mcarpenter@nchba.org
Tim Minton, tminton@nchba.org
or call NCHBA at (800) 662-7129