Congratulations Senior Democrats!!!!!!!!!!

The NC Senior Dems has just changed the law regarding the Homestead Act on this day, August 2, 2007.  Our bill passed with a unanimous vote in the General Assembly today.

The Governors signature will make it law.

Starting January 1, 2008 seniors can begin to qualify for property tax break exclusions. According to Bill Wilson of the AARP, House Bill 1499 raises the income eligibility limit to qualify for the Homestead Exemption to $25,000. Qualifying homeowners can reduce the tax appraisal value of their primary residence by $25,000 (this is an increase from the current $20,000) or 50% of the appraised value, whichever is greater. Once you qualify for this exclusion you stay qualified.

Beginning January 1, 2009, a property tax deferral will benefit NC residents who meet the criteria below. The amount of taxes deferred is based on the income eligibility limit under the Homestead Exemption. If the owner (1) has an income for the preceding calendar year of not more that 150% of the Homestead income limit (e.g., $37,500 when the Homestead limit is $25,000), (2) has occupied the property as a permanent residence for at least 5 years, (3) is at least 65 years old or totally and permanently disabled, and (4) the owner is a NC resident; then they qualify for the benefit. Qualifying homeowners may defer the portion of tax imposed if it exceeds a percentage of the owner’s income as:

• Income Percentage
• Less than Homestead income limit 4.0%
• 100% to 150% of Homestead income limit

For example, if a homeowner’s property tax is $1,500 and they have $24,000 in income, taxes in excess of $960 (4% times $24,000), or $540 ($1,500 minus $960), can be deferred. If a homeowners property tax is $3,000 and they have $35,000 in income, taxes in excess of $1,750 (5% times $35,000), or $1,250 ($3,000 minus $1,750) can be deferred. The deferral process does place a lien against the property. If the owner transfers the residence, dies, or ceases using the property as a permanent residence the taxes and interest are due within nine months. You must qualify for deferrals every year.

We are NOT totally satisfied with this bill and after studying the bill carefully we think this bill seems to be written incorrectly. We never wanted any liens placed on seniors properties through Circuit Breaker deferments but that is what the NC Senate handed us.

The General Assembly gave us the most help yet we are NOT satisfied with the cap. The whole point to pushing our bill through the GA was to get the cap on the Homestead Exclusion high enough to ride along with the COLAS so we would NOT have to address this problem again for years to come.

Certainly moving a bill through the General Assembly is a very difficult thing to do. I know I have had quite an excursion traveling with this bill through the General Assembly. This journey took me through so many twists and turns. If I didn't know any better, I would have thought I had been traveling with Harry Potter. It certainly was my pleasure to get the experience of a process that takes you through the birth of a law or amending a current law.

Seniors, after January 1, get ready and head down to your tax office where you pay taxes and get yourselves qualified for tax breaks you so richly deserve!!!!!!!!!!!

Shirley Wiggins

Special Legislative Action Committee Chairman

NC Senior Democrats

704-824-9368 demwiggins@aol.com

July 10, 2007