General Assembly Mandates Reappraisal Postponements

The General Assembly has been very interested in local property taxes this session. 

Last month it added to the November ballot a proposed state constitutional amendment that would mandate future unspecified property tax levy limitations. 

It then passed two related bills (S889 and S474) that would postpone 2026 tax reappraisals in some of the twelve counties that conducted them this year. The governor subsequently signed both bills into law.

My colleague Kara Millonzi has already blogged about the potential impact of these two bills on local budgets here.

Today I discuss the potential impact of these two bills on the property tax process in the affected counties, focusing in particular on 2026 and 2027 property tax appeals.

S889, now S.L. 2026-8, mandates postponement of 2026 reappraisals in counties with populations greater than 15,000. The affected counties would be required to use their 2025 tax values for their 2026-27 budgets and wait until the 2027-28 tax year to apply their new 2026 reappraisal values.

Twelve counties conducted reappraisals in 2026: Anson, Bladen, Buncombe, Chowan, Clay, Davidson, Guilford, Harnett, Onslow, Pamlico, Pender, and Scotland. Three of those counties, Chowan, Clay, and Pamlico, have populations under 15,000 and therefore would be exempt from the required postponement. Those three counties would be permitted to move forward with their 2026 reappraisals, while the other nine counties would be required to postpone the implementation of their new reappraisal values until 2027.

However, S474 changes which counties would be exempt from the mandatory reappraisal postponements.  Under S474, a county would be permitted to move forward with its 2026 reappraisal if it:

1. Has a population of less than 12,000 according to the latest federal decennial census;
2. Is in the year designated in G.S. 105-286(a)(2)a. and has a population of less than 150,000, according to the latest federal decennial census;
3. Has levied a property tax rate, exclusive of any special tax area, in excess of ninety-five cents (95¢) per one hundred dollars ($100.00) of appraised value of property subject to taxation at any point in the prior four taxable years; or,
4. Is in an affected area, as defined in Section 1.4 of S.L. 2025-2, is not otherwise exempt under subdivision (1) of this subsection, and for the taxable year beginning July 1, 2026, adopts a property tax rate at or below the rate equal to its revenue-neutral property tax rate established under G.S. 159-11(e) rounded up to the next whole cent.

Of the twelve 2026 reappraisal counties, I believe three would immediately satisfy S474’s exemption criteria: Clay, Harnett, and Scotland. See the table below.

Buncombe potentially could qualify for an exemption from a reappraisal postponement if it adopts a tax rate at or below its revenue-neutral rate. (For more on revenue-neutral tax rates, see this post.)  However, the 2026-27 budget adopted by the county in June included a tax rate roughly 10% above revenue neutral.  Unless the county revisits it budget and adopts a lower tax rate, Buncombe will not be exempt from the reappraisal postponement and will not be permitted to use its 2026 reappraisal tax values for the 2026-27 fiscal year.   

The bottom line: eight counties and their municipalities (Anson, Bladen, Chowan, Davidson, Guilford, Onslow, Pamlico, and Pender) would be required to postpone their 2026 reappraisals to 2027.  Three counties and their municipalities (Clay, Harnett, and Scotland) would be permitted to implement their 2026 reappraisals.  The status of Buncombe County and its municipalities depends on whether the county amends its budget to lower its tax rate to revenue-neutral or below.

Note that section 2 of S474 explicitly authorizes any local government affected by the mandatory reappraisal postponement to change its tax rate without concern for the limitations in GS 159-15.  That statute normally prohibits changes to the property tax rate after a local government adopts its budget.

Previous versions of S474 would have waived the “equalization” of public service company values if a county’s sale assessment ratio fell below 90% as required by GS 105-284(b). The final version of S474 does not include such a waiver.  As a result, counties who are forced to return to their (lower) 2025 property valuations are at risk of losing a substantial percentage of their public service company valuations as well.

A few additional observations about the impact S889/S474:

What happens with 2026 appeals?

Plenty of taxpayers have already appealed their 2026 reappraisal values in the affected counties. Many of those appeals have been resolved. Many others remain pending. If the county shifts back to its 2025 appraisal values, the appeals based of the new 2026 reappraisal values become moot for the 2026-27 tax year.

In most (nearly all?) cases, the 2025 tax values will be lower than the 2026 tax values. Remember, those 2025 values are based on the county’s last reappraisal which might have occurred up to seven years ago. Most property values were lower several years ago than they are today.  

Presumably, taxpayers will be happy to accept the lower 2025 tax values and not seek to appeal them. Would they have the right to appeal those values if they wished? 

In most counties we are past the appeal deadline, which is the county board of equalization and review’s (BOER) adjournment date. G.S. 105-322(g)(2)(a). However, both S889 and S474 state that taxpayers in the affected counties have the right to appeal their 2026 tax values “during the 2026 calendar year.” I think this means that the bills would extend the 2026 appeal window for all the affected counties through December 31, 2026. The 2026 BOER adjournment dates would become irrelevant. Hopefully few taxpayers would take advantage of this extended appeal period due to the fact that their tax values were reduced when the counties reverted back to their 2025 values for the 2026 tax year.

The more vexing question is what to do with the completed and pending appeals of the 2026 values, which will now first apply in 2027. 

I think the results of completed 2026 appeals should remain effective and applicable to the values that the counties first use in 2027. 

I think the counties have a decision to make about pending appeals. Do they shut them down on the theory that they are moot given the switch back to 2025 values for the 2026 tax year? Or do they let the appeals play out, on the theory that those appeals are relevant for the values that the county will use for the 2027 tax year?

While either approach is defensible, I think the latter it is preferable to resolve the pending appeals.  If a taxpayer was unhappy with their 2026 reappraisal value this year, presumably they will still be unhappy with that value when it is first used next year.  If their pending 2026 appeal is terminated, they will be forced to re-start the appeal process in 2027.  That seems like an unnecessary hurdle.  My advice is for counties to continue to hear and resolve 2026 value appeals and apply the results to next year’s taxes.

What is the deadline for taxpayers to appeal their 2027 tax values?

As mentioned above, the Machinery Act sets the annual appeal deadline at the date on which a county’s BOER adjourns. In a reappraisal year, the adjournment date must be no later than December 1. G.S. 105-322(e).  It is often much earlier; in Buncombe County, this year’s adjournment date/appeal deadline was May 5.

However, both S889 and S474 state that taxpayers in the affected counties will have the right to appeal their 2027 tax values “during the calendar year.”  As discussed above for 2026 appeals, this language appears to extend the 2027 appeal deadline to December 31, 2027.  If so, then the counties’ 2027 BOER adjournment dates become irrelevant. 

But both bills also state that such appeals much be “submitted in timely manner for an appraisal that became effective January 1, 2027.”  Normally, 2027 appeals would be timely only if they were submitted on or before the BOER’s 2027 adjournment date. This language appears to contradict the earlier suggestion that 2027 appeals may be submitted until the end of the 2027 calendar year.

How should counties resolve this apparent contradiction? I believe that the “timely manner” language should control, meaning that 2027 appeals must be submitted by the BOER’s 2027 adjournment date as usual.

What should the assessor do about new property data gathered during a now-postponed 2026 reappraisal?

Counties still have the obligation to appraise all real property as of its condition on January 1, 2026, even if their 2026 reappraisals have been postponed under S889/S474.  If the assessor learned new information about a parcel during the 2026 reappraisal process, that new information should be incorporated into the 2026 value but appraised using the county’s “old” schedule of values.

For example, assume that a county obtained drone photography of several neighborhoods  during 2025 as part of the 2026 reappraisal process. That photography revealed the presence of a building on Parcel A, which was previously assumed to be vacant. Regardless of whether the county is forced to postpone its 2026 reappraisal, the county should still list and appraise that building on Parcel A for 2026.  If the county is subject to reappraisal postponement, the building would be appraised using the county’s previous schedule of values.

How should counties give taxpayers notice of the new 2026 and 2027 appraisal values?

In affected counties, the 2026 tax bills should constitute adequate notice of the “new” (actually old) tax values that are based on the county’s “old” schedule of values. As mentioned above, taxpayers have until the end of calendar year 2026 to file appeals of their 2026 values (but presumably few will do so given that the values on the 2026 bills generally will be lower than the reappraisal values that were postponed until 2027).  

For 2027, the affected counties should again send notice of the new 2027 values (based on the postponed 2026 reappraisal), even though the county already sent taxpayers notice of those same reappraisal values in 2026. 

When will the affected counties be required to calculate and publish a revenue-neutral tax rate?

If a county is forced to postpone its 2026 reappraisal to 2027, that county should not be obligated to publish and calculate a revenue-neutral tax rate until 2027.  The revenue-neutral obligation arises under GS 159-11(e) when “a general reappraisal of real property has been conducted . . . .”  I do not think a reappraisal has been “conducted” until the new reappraisal values take effect, which will be 2027 for the affected counties.

The point of the revenue-neutral calculation is to allow taxpayers to compare pre- and post-reappraisal tax rates after the local government’s tax base changes due to the reappraisal.  If the tax base has not changed because the reappraisal values have yet to take effect, there is no need for a revenue-neutral rate.