North Carolina GOP lawmakers consider reducing property taxes
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Some North Carolina Republicans are floating the idea of reforming and reducing property tax burdens on homeowners as part of an effort to address housing affordability.
Why it matters: Property taxes help fund many of the critical functions that local governments perform, from operating public schools and paying police officers and firefighters to building sidewalks and maintaining parks.
- But after a sharp rise in home prices since 2020, growing property taxes are also a financial pressure for many homeowners and contribute to increased rents as well.
Zoom in: Property values, which in part determine tax bills, increased by 50.6% across Wake County between 2020 and 2024, the largest ever increase in the county's history, and many across the Triangle have experienced larger tax bills since then.
- Many cities have asked residents to pay more because they are also dealing with inflation, specifically on salaries and construction materials.
- Raleigh passed its most recent city budget without a tax increase, after Mayor Janet Cowell noted during her election campaign that many residents were frustrated by growing tax bills.
Driving the news: House Speaker Destin Hall has formed a committee to study ways to reduce property tax burdens. The committee meets for the second time in Raleigh on Wednesday.
- Gov. Josh Stein has said previously he's open to changes to property taxes as long as they don't harm cities and counties.
- Rep. Erin Paré, a Republican who represents part of southern Wake County and co-chair of the committee, said constituents are upset about rising property bills in Wake County.
- "I hear a lot about it from seniors, but also from young families who are trying to purchase a home," she said. "I think achieving the American dream is harder and harder when you're looking at a continually rising bill every single year because you decide to purchase a home."
What they're saying: Rep. Mike Schietzelt, a Republican who represents part of northern Wake County, said many of his constituents are also frustrated by their growing tax bill. He says he's worried about how they impact older residents on fixed incomes, as well as lower-income families.
- "I had one constituent tell me that after the most recent round of revaluations, his monthly payment on his mortgage went up $250. I've had other people tell me they've experienced almost $500 on their monthly payments because of taxes and insurance," Schietzelt told Axios
- "If that's a rental property, then that's going to be passed down to renters," he added. "I grew up in a low-income family ... to hear numbers like $250 a month is shocking."
The big picture: North Carolina is not alone in considering changes to property taxes.
- Florida, a state grappling with high insurance costs, is considering several proposals to slash property taxes. Analysts say it could cost municipalities there billions of dollars and force them to try to find new ways to raise revenues.
Between the lines: Schietzelt said the House wants to be smart in its proposals. "It's trying to find that balance between doing something about affordability, but not kneecapping local governments in the process."
- Schietzelt said he wants to learn more about what other states have done and the ramifications of those policies, like California's Proposition 13 — a 1978 initiative that limited property tax increases — and Massachusetts' Proposition 2½, a 1980 law that limits how much municipalities can raise taxes.
- Paré said other options would be to expand eligibility for tax relief programs for those 65 and up or those with disabilities.
What's next: Paré said she hopes that the committee will provide a proposal on potential legislation to address property taxes in the coming months.
- Ultimately, that will require the House and Senate, which are still divided on a state budget, to come to an agreement.