The Real Estate and Building Industry Coalition is reminding builders to apply for a tax exemption on residential and commercial property improvements before the Jan. 31 deadline.
Gov. Pat McCrory in August signed into law House Bill 168, which exempts builders from tax on a property’s increased value if the appreciation stems from the construction of a single-family residence or duplex held for sale by the builder. The exclusion also applies to increased values attributable to subdivision or other improvements.
The exemption for residential properties defers taxation of the unsold inventory and appraises the value of a finished-building lot at the time of sale. It can be obtained annually for up to three years from the time the improved property was first listed for taxation by the builder.
The exemption for commercial properties ends at the earliest of the following events: when the improved property is sold, when a building permit is issued, or in five years.
REBIC, which calls the law one of the building industry’s most important legislative victories, says builders must apply for this exemption each year in January during the regular listing period. Late applications may be accepted for “good cause,” but local governments may not approve applications that have been submitted later.
The N.C. Department of Revenue has an application form that most county tax departments accept for the exemption. It can be found at bit.ly/1RnV18Z.
REBIC, based in Charlotte, is a trade organization whose members include the Charlotte Regional Realtor Association, Home Builders Association of Greater Charlotte, the Greater Charlotte Apartment Association, and development firms.