'We've got to shift': NC lawmakers eye property tax relief, housing affordability

A bipartisan committee of North Carolina lawmakers met for the first time Wednesday to begin the process of examining state laws governing property taxes — part of an effort to deliver financial relief to homeowners without harming municipal services.

The House Select Committee on Property Tax Reduction and Reform was created last week and kicked off Wednesday with a presentation on what the state’s already doing with some targeted property tax relief programs — to the tune of more than $100 million a year, mostly spent on seniors and military veterans — as well as presentations on what other states are doing.

Concerns over senior citizens were a key focus of the meeting. Many older Americans no longer work and are living on a fixed income of Social Security payments in addition to any other pensions or investments they may have. Many have also lived in the same home for decades and in some cases no longer have mortgage payments. But rising property values have caused property taxes to rise as well, increasing their bills.

“We’ve got to shift, to make them be able to age in place,” Rep. Carla Cunningham, D-Mecklenburg, said. “I think that's what a lot of seniors are dealing with. They can't stay in their home because it's too expensive.”

Younger people, as well as those unable to afford a home, also received some attention at the meeting. Several lawmakers noted that one reason rents have risen in recent years is that landlords are passing off property tax hikes onto their renters — something that could apply to people renting homes and apartments, as well as to businesses renting space.

“It's affecting not only potential homeowners or current homeowners,” Rep. Erin Paré, R-Wake, said Wednesday. “It’s also impacting renters, and even small businesses who rent. That cost gets pushed off on them. So this is a big deal.”

In recent years, Republican state lawmakers have rewritten tax laws to reduce income taxes and expand the list of things people have to pay sales taxes on. But the state legislature has so far made few changes related to property taxes.

Housing affordability is a growing and bipartisan political issue, however, and the committee intends to show voters that the legislature is paying attention to the issue as the 2026 elections approach, when every state lawmaker will be up for reelection.

Unlike income tax and sales tax revenue, property tax revenue doesn’t go to the state. The money stays in the cities and counties that collect those taxes, helping fund local schools, parks, police, sheriffs and more. And individual cities and counties — not the state legislature — are in charge of setting local property tax rates.

A broad effort to lower property taxes could lead to budget cuts for schools and police. This new push is expected to be more targeted. State House Speaker Destin Hall said in a statement last week that the new committee would look into “practical ways to reduce the burden on homeowners without undermining local services.”

A group that lobbies on behalf of cities and counties, the North Carolina League of Municipalities, is wary of any proposals that might cut into their ability to collect taxes. Scott Mooneyham, a league spokesman, told reporters after Wednesday’s hearing that about half of all municipal spending goes to public safety — police departments, sheriff’s offices and fire departments.

“It is impossible to substantially alter property taxes in the state of North Carolina without defunding the police,” he said.

In some parts of the state — especially in more rural areas — a lack of new development or the loss of people and businesses have forced local leaders to raise rates on those who remain.

Most North Carolina counties shrank in population between 2010 and 2020, even though the state’s population as a whole skyrocketed. The fastest-growing parts of the state, meanwhile, have been able to keep property tax rates low as new development has broadened the base of what can be taxed.

But even in Wake County — which has among the lowest property tax rates in North Carolina, and whose residents are the wealthiest in the state — some lawmakers are still concerned with the impact of any potential rate hikes. That is, in part, because Wake County also has higher property values than most of the rest of the state.

Rep. Maria Cervania, D-Wake, is a former Wake County Commissioner. She noted that most of what any county in North Carolina pays for — schools and law enforcement make up the vast majority of county spending — are also supplemented by state and federal funds. But as Republicans have slashed taxes and spending at the state and federal levels, she said, that has forced cities and counties to step up and fill those gaps.

GOP leaders in the state legislature are currently debating whether to keep lowering income tax rates. On Wednesday, Cervania told them to reconsider how they can square that stance with these other concerns over property taxes.

“That is what, I believe, is a large part of the increases in our counties and municipalities, in terms of their tax rate,” she said. “So we need to look at ourselves, too, in this responsibility. I don't know what the answer is, but it's a balance.”