G.S. 105-277.1B
North Carolina property tax homestead circuit breaker that limits a qualifying owner’s taxes to 4% or 5% of income and defers the excess as a lien.
G.S. 105-277.1B – Property tax homestead circuit breaker
North Carolina’s Homestead Circuit Breaker is a property-tax deferment program for qualifying older homeowners and homeowners who are totally and permanently disabled. It does not erase property taxes and it is not a cash grant. Instead, it limits the taxes on the qualifying permanent residence to a percentage of the owner’s income. The amount above that limit is deferred and remains a lien on the property.
The North Carolina Department of Revenue (NCDOR) has published the official AV-9 application for tax year 2027. The application is filed with the county tax assessor, not with NCDOR. The form says applications must be filed by June 1 to be timely. It also includes a late-application route when the applicant shows good cause, so this entry uses rolling in its deadline metadata rather than presenting the passed timely date as though it were the only possible route. A late application is not automatically approved and may apply only to county or municipal taxes levied in the calendar year in which the late application is filed.
At a glance
| Question | Official 2027 answer |
|---|---|
| Who runs it? | North Carolina Department of Revenue sets the form and statutory guidance; the county tax assessor receives and decides the application. |
| What is the benefit? | Taxes are limited to 4% or 5% of qualifying income, with the amount over the limit deferred. |
| What are the 2027 income bands? | Up to $39,900 uses the 4% limit; more than $39,900 and no more than $59,850 uses the 5% limit. |
| What happens to the excess? | Deferred taxes remain a lien on the property and can become due with interest after a disqualifying event. |
| When should you file? | During the regular listing period and no later than June 1 for a timely application. |
| Can you file after June 1? | Possibly, if the applicable authority approves a late application after a showing of good cause. |
| Where do you file? | With the tax assessor in the county where the property is located. |
| Is a new application required? | Yes. The official AV-9 says a new application is required every year. |
What the program does
The circuit breaker responds to a mismatch between a qualifying owner’s income and the property tax on the owner’s permanent residence. A county still calculates the property tax under its normal valuation and tax-rate rules. If the owner qualifies for the circuit breaker, the owner’s tax for the year is limited to the applicable income percentage. The portion above that amount is deferred rather than forgiven.
For the 2027 tax year, NCDOR’s AV-9 describes two bands:
- If the owner’s income for the preceding calendar year is no more than $39,900, the tax limit is 4% of income.
- If income is more than $39,900 but no more than $59,850, the tax limit is 5% of income.
The second amount is 150% of the first threshold. These figures are specific to the 2027 tax year and should not be carried forward to a later year without checking that year’s AV-9. The form treats income as an amount that must be supported with the required income information, and married applicants report the total income of both spouses where the form asks for it.
The deferred amount is a future obligation. It stays attached to the property as a lien. The official form warns that the last three years of deferred taxes before a disqualifying event become due and payable with interest on the date of that event. The year of the disqualifying event is also fully taxed. This makes the circuit breaker useful for current cash flow but different from a permanent exemption.
Who can qualify
The official 2027 AV-9 and G.S. 105-277.1B describe several requirements that must be satisfied together. Meeting only the age or disability test is not enough.
Age or permanent disability
As of January 1 of the tax year, the owner must be at least 65 years old or totally and permanently disabled. An applicant who is under 65 and claims disability must use the disability-certification process required by the county and NCDOR. The AV-9 points applicants to Form AV-9A when disability certification is required.
If one spouse is at least 65, the form’s question is written so that the applicant can answer the age question without filing AV-9A. If both spouses are under 65, at least one must be totally and permanently disabled for the disability route to apply. Do not assume that a temporary medical condition or an ordinary work limitation meets the statutory standard.
Five years of ownership and occupancy
The owner must have owned the property for the last five full years before January 1 of the tax year and must have occupied it for a total of five years as a permanent residence. This is a real qualification test, not a suggestion to remain in the home for five years after filing. A recent purchaser may therefore be ineligible even if the home is already the person’s principal residence.
The property must be the owner’s permanent legal residence. A second home, rental property, or investment property does not qualify as the permanent residence for this program. The AV-9 asks about secondary residences, whether a spouse lives in the home, and whether the owner or spouse is in a health-care facility so the assessor can evaluate the residence facts.
Income limit
For tax year 2027, the official form sets the income eligibility limit at $39,900 and the 150% ceiling at $59,850. The relevant income is for the preceding calendar year. Applicants should not substitute a current monthly budget, only taxable income, or only one spouse’s income when the form requires information for both spouses.
NCDOR’s instructions require the first two pages and Schedule 1 of the federal income tax return for the preceding calendar year, unless the applicant does not file a federal return. Married applicants who file separately must provide both returns. A person who does not file a federal return must attach documentation supporting the reported income, such as wage, pension, Social Security, interest, dividend, or other payment records.
Co-owners
Co-owner rules can decide the outcome even when one person appears to qualify. The 2027 AV-9 says each owner other than a husband and wife must file a separate application. It also states that all owners must qualify and elect to defer taxes under this program or the property cannot receive the circuit breaker benefit.
Before filing, review the deed and determine every ownership interest. Siblings, unmarried partners, adult children, trusts, and other arrangements should not be treated like a simple sole-owner case. The form asks whether the applicant and spouse own 100% of the property and requests ownership percentages for other owners. If the title is complicated, ask the county tax assessor how the county wants the application and supporting documents prepared.
The 2027 amount and the tradeoff
The 4% and 5% limits are percentages of income, not percentages of the home’s assessed value. For example, an owner whose qualifying income is $30,000 would compare the property tax with a 4% limit of $1,200. An owner whose qualifying income is $45,000 would compare the tax with a 5% limit of $2,250. The difference between the ordinary tax and the applicable limit is not a payment from the state; it is the amount deferred under the program. These examples illustrate the calculation only and do not replace the county’s determination of qualifying income and tax.
The deferred balance can matter when the home is sold, transferred, or ceases to be the owner’s permanent residence. Death is also listed as a disqualifying event, although the statute and county administration include exceptions and special rules in some spouse and occupancy situations. A homeowner planning to move soon should ask the assessor for a deferred-tax estimate and understand what could become due before choosing the circuit breaker.
The circuit breaker cannot be stacked with the Elderly or Disabled Exclusion or the Disabled Veteran Exclusion for the same owner and year. The AV-9 allows an applicant to ask for consideration under more than one program when tax values or rates are not yet known, but each owner may receive a benefit from only one of the three programs. The assessor provides the decision and, where relevant, an option notice and appeal instructions.
How to apply
1. Get the current AV-9
Use NCDOR’s official “AV-9 2027 Application for Property Tax Relief” page. The form is a combined application for the Elderly or Disabled Exclusion, Disabled Veteran Exclusion, and Circuit Breaker Tax Deferment Program. Select the circuit breaker program in Part 1 and complete the parts listed for that program.
2. Confirm the county and property facts
The application must go to the county tax assessor where the property is located. It should not be mailed to NCDOR. Use the county assessor list linked from the form to identify the right office, address, telephone number, and any local submission instructions. Ask whether the office accepts mail, in-person delivery, or another method, and keep proof of submission.
Check the permanent-residence answer, ownership history, five-year occupancy history, spouse information, and ownership percentages before signing. A mismatch between the application and the deed or county record can delay review or cause the assessor to deny the benefit.
3. Complete disability certification if needed
If the applicant is relying on total and permanent disability and the AV-9 requires certification, complete Form AV-9A or the county’s required process. NCDOR describes AV-9A as the certification form for a person claiming total and permanent disability. Ask the assessor whether the certification must come from a North Carolina-licensed physician or an authorized government agency and whether any local cover sheet is required.
4. Assemble income evidence
Complete Part 5 of the AV-9. Provide the first two pages and Schedule 1 of the federal return for the preceding calendar year, or provide the alternative income records required when no federal return was filed. The form lists wages, interest, dividends, capital gains, IRA distributions, pensions and annuities, disability payments, Social Security benefits, and other money received. Include both spouses’ information when the form requires a combined total.
Do not send a blank application and assume the assessor will calculate the missing income information later. NCDOR’s form says the application will not be processed until the income-tax information is received. If the preceding return has not yet been filed, the form provides a way to identify that it will be submitted when filed, but the supporting information still must reach the assessor.
5. File by the timely deadline or explain a late filing
The official form states that the application must be filed by June 1 to be timely. The statute says the application should be filed during the regular listing period and must be accepted through June 1 preceding the tax year for which relief is claimed.
The same AV-9 includes a late-application rule. After the due date, the appropriate authority may approve an application if the applicant shows good cause for missing the deadline. The form cites G.S. 105-282.1(a1) and warns that an approved untimely application applies only to property taxes levied by the county or municipality in the calendar year in which the untimely application is filed. A late filing is therefore a request for discretionary approval, not an extension that every applicant automatically receives.
Because the official source documents this late route, an applicant who missed June 1 should contact the county assessor promptly, explain the reason, ask which authority reviews the good-cause request, and submit the complete AV-9 and evidence. Do not assume that a late application will restore every state, county, and municipal charge or reach back to an earlier year.
6. Sign, retain copies, and respond to the decision
Complete Part 6, sign the affirmation, and keep a complete copy of the application and all attachments. The assessor reviews the file and sends a notice of decision. If the assessor does not approve the request or the applicant disagrees with the program choice, the notice explains the available appeal procedure. Respond to any option notice within the specified period; the AV-9 says that failing to respond can be treated as declining the programs.
Documents to prepare
The exact county checklist may vary, but a practical packet includes:
- The current NCDOR AV-9 for the tax year being claimed.
- A deed, tax record, or other ownership evidence if the assessor requests it.
- Evidence that the property is the permanent legal residence.
- The first two pages and Schedule 1 of the preceding calendar year’s federal return, or records supporting income when no federal return was filed.
- Both spouses’ returns when married applicants filed separately.
- Wage, pension, Social Security, interest, dividend, retirement, disability, and other income records that explain the total reported on the form.
- AV-9A disability certification when required.
- Ownership percentages and separate applications for non-spouse co-owners.
- A written good-cause explanation and any supporting evidence if filing after June 1.
Keep the county’s receipt, confirmation email, or stamped copy. A folder containing each year’s approved AV-9 and deferred-tax notice is useful because the balance can remain attached to the home after the current bill is reduced.
What to monitor after approval
Approval is annual. The official form says a new application must be filed every year, so do not treat one approval as a permanent enrollment. Recheck the current year’s income limit and use the current year’s form instead of reusing an old threshold.
Track the ordinary tax, the amount paid under the limitation, the amount deferred, and the cumulative deferred balance. Ask the county for a current estimate before refinancing, changing the deed, adding an owner, transferring the home, moving permanently, or entering a long-term care arrangement. Those changes can affect the permanent-residence test or trigger the rules for deferred taxes.
Temporary absence for health reasons or an extended stay in a rest home or nursing home does not automatically end the benefit under the statute. The statute describes conditions involving the residence, spouse, and dependents, so a homeowner should report a major change to the assessor rather than relying on a general internet explanation. The treatment of a surviving spouse, co-owner, transfer, or estate can depend on facts that the county must review.
Common mistakes
Treating the benefit as forgiveness
The excess is deferred, not removed. A lien remains on the property, and the last three years of deferred taxes before a disqualifying event can become due with interest. Compare the current cash-flow benefit with the likely future obligation.
Using an old income limit
The 2027 limits are $39,900 and $59,850. A later AV-9 may use different figures. Always check the current NCDOR form before calculating eligibility.
Sending the form to the wrong office
NCDOR publishes the form, but the application goes to the county tax assessor where the property is located. Sending it to the state department does not satisfy the filing instruction.
Ignoring a non-spouse co-owner
All owners must qualify and elect the circuit breaker for the property to receive this benefit. Confirm title and ownership percentages before preparing the packet.
Assuming a late application is an ordinary extension
The late route requires good cause and approval by the applicable authority. It also has a limited tax-year effect under the official form. Contact the assessor immediately and get the county’s instructions in writing.
Applying once
The AV-9 says a new application is required every year. Put the next filing task on a calendar after the assessor confirms the local process.
Bottom line
For a North Carolina homeowner who is 65 or older or totally and permanently disabled, has owned and occupied the home for the required five years, and falls within the 2027 income limits, the circuit breaker can reduce the tax that must be paid immediately. The 4% or 5% limit is meaningful only because the remainder is deferred. It can help a fixed-income household remain in a permanent home, but it creates a lien and a possible future bill.
The timely June 1 filing date for the 2027 application has passed. The official AV-9 still describes a good-cause late-application process, so applicants who missed the date should contact the county assessor rather than assume that the opportunity is permanently unavailable. Approval is discretionary, and the county will decide what documentation and authority review apply.
Start with the current NCDOR AV-9, verify the county’s instructions, prepare complete ownership and income evidence, and ask for a deferred-tax estimate before choosing this program over another property-tax relief option. Those steps keep the page useful without presenting a closed timely deadline as an invented current date.