Q. Must the owner be a builder and must the owner have a general contractor's license?
A. Yes. The owner must be a builder who has a valid general contractor's license.
Q. How can the license be verified?
A. The license number and holder's name can be verified at this page on the N. C. Licensing Board for General Contractors: http://www.nclbgc.net/licfr.html
Q. The benefit is for the residence. Does the term "residence" include detached items?
A. The Property Tax Division recommends including as "residence" the detached garages, pools, gazebos, tennis courts, etc. if located on the dwelling homesite and if they were built in conjunction with the dwelling.
Q. Does the term "residence" include manufactured homes and modular homes?
A. It is the opinion of NCDOR that the term "residence" includes manufactured homes and modular homes. They are improvements made to the land by a builder, even though most of the construction was completed at a manufacturing facility. The owner would still have to meet the definition of "builder" and the property must have received a certificate of occupancy.
Q. What are the disqualifying events?
A. A disqualifying event occurs at the EARLIEST of (1) when the builder transfers the residence, (2) when the residence is occupied by the builder or by someone other than the builder with the builder's consent, (3) five years from the time the improved property was first subject to being listed for taxation by the builder, and (4) three years from the time the improved property first received the property tax benefit.
Q. One of the disqualifying events occurs when the builder transfers the residence. Does this mean that any transfer will be a disqualifying event, even if between related entities?
A. Yes. The statute clearly states that a transfer is a disqualifying event, with no exceptions. If a deed is recorded that transfers the property, with or without consideration, the property will be disqualified.
Q. One of the disqualifying events occurs five years from the time the improved property was first subject to being listed for taxation by the builder. Does the five year period start when the completed property was first subject to being listed for taxation?
A. No. The five year period starts when the improved property, whether still under construction or complete, is first subject to being listed. The property is improved once the construction of the improvements begins. The improvements may or may not be complete but they are subject to listing, thus starting the five year period.
Q. What is the maximum number of years that a builder can receive the property tax deferral?
A. Three years.
Q. When is the first year that property is eligible for deferment?
A. 2010. The "effective date" language in S.L. 2009-308 reads: "This act is effective for taxes imposed for taxable years beginning on or after July 1, 2010." which is the...way of saying that it is effective for the 2010 tax year.
It is clear that if the builder was not receiving the property tax benefit prior to 2013, they cannot receive any benefit for 2013 or later.