GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2015

H                                                                                                                                                    3

HOUSE BILL 168

Committee Substitute Favorable 6/16/15
Third Edition Engrossed 6/17/15

Short Title:        Exempt Builders' Inventory.	(Public)
Sponsors:
Referred to:

March 9, 2015

A BILL TO BE ENTITLED

AN ACT to exempt from property tax the increase in value of residential real property held for sale by a builder, to the extent the increase IS attributable to subdivision or improvements by the builder.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105‑273(3a) is reenacted and reads as rewritten:

"(3a)     "Builder" means a taxpayer licensed as a general contractor under G.S. 87‑1 and engaged in the business of buying real property, making improvements to it, and then reselling it."

SECTION 2.  Article 12 of Chapter 105 of the General Statutes is amended by adding a new section to read:

"§ 105‑277.02.  Certain real property held for sale classified for taxation at reduced valuation.

Residential real property held for sale by a builder is designated a special class of property under authority of Article V, Sec. 2(2) of the North Carolina Constitution. For purposes of this section, "residential real property" is real property that is intended to be sold and used as an individual's residence immediately or after construction of a residence, and the term excludes property that is either occupied by a tenant or used for commercial purposes such as residences shown to prospective buyers as models. Any increase in value of this classified property attributable to the construction of a new single‑family residence or a duplex on the property by the builder is excluded from taxation under this Subchapter as long as the builder continues to hold the property for sale. In no event shall this exclusion extend for more than three years from the time the improved property was first subject to being listed for taxation by the builder. The builder must apply for this exclusion annually as provided in G.S. 105‑282.1. In appraising property classified under this section, the assessor shall specify what portion of the value is an increase attributable to subdivision or other improvement by the builder."

SECTION 3.  This act is effective for taxes imposed for taxable years beginning on or after July 1, 2016, and applies to subdivision of or other improvements made on or after July 1, 2015.