Property Tax Bulletin #180

The Builders' Inventory Exclusion

Thursday, July 6, 2023

For years, home builders have been pushing to exempt their real property inventory from property taxes in the same fashion that personal property inventory held by traditional merchants and manufacturers is exempt under Chapter 105, Sections 275(32a), (33), and (34) of the North Carolina General Statutes (hereinafter G.S.).

Home builders got their wish, sort of, for a few years. In 2010, the General Assembly enacted G.S. 105-277.1D, which created a deferral for taxes attributable to the construction of new, unsold residential homes. That deferral expired in 2013.

In 2015, the exclusion for unsold new homes returned in a different form. S.L. 2015-223, codified as G.S. 105-277.02, expanded the now-repealed deferral. Instead of deferring taxes, this statute excludes them entirely. And the exclusion covers non-structural improvements and commercial properties, neither of which fell within the scope of the old provision.

This bulletin updates and replaces Property Tax Bulletin No. 169, “New Exclusion for Improvements to Residential and Commercial Real Property.”

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