Dive Brief:
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North Carolina homebuilders will pay far less property tax on finished-but-unsold homes if a proposal in the state Legislature passes.
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Despite objections from Charlotte, NC, officials, the state House passed a measure to tax the builders based on the value of the lot only — and not the home. One builder told The Charlotte Observer he would save $750 to $1,250 per house if the Senate also approves the bill and the governor signs it.
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Officials have said vacant houses require public services like fire and police protection, just as occupied homes do. But the state Home Builders Association countered that unoccupied homes require fewer services. For example, empty houses do not send children to local schools.
Dive Insight:
The measure under consideration is designed as an incentive for homebuilders to do more construction, which the HBA’s political action committee estimates will create 2,000 jobs, bolster the inventory of homes for sale by approximately 500, and add hundreds of taxpayers to the state when they eventually buy the houses.
The state House passed the proposal on June 17, and proponents have said they now expect the Senate to support the measure.
Other industries in North Carolina have been exempt from paying taxes on unsold business inventory since 1987, but homes were not considered “inventory” by lawmakers at the time.