Builder Exclusion

Residential Real Property held for sale by a builder is designated a special class of property in North Carolina. 


Residential real property is real property that is intended to be sold and used as an individual’s residence immediately or after construction of a residence, and the term excludes property that is either occupied by a tenant or used for commercial purposes such as residences shown to prospective buyers as models.  Any increase in value of this classified property attributable to subdivision of, improvements other than buildings, or the construction of either a new single-family residence or a duplex on the property by the builder is excluded from taxation under this Subchapter as long as the builder continues to hold the property for sale. In no event shall this exclusion extend for more than three years from the time the improved property was first subject to being listed for taxation by the builder.

Commercial real property held for sale by a builder is designated a special class of property in North Carolina. Commercial real property is real property that is intended to be sold and used for commercial purposes immediately or after improvement. Any increase in value of this classified property attributable to subdivision of or other improvements made to the property, by the builder, is excluded from taxation under this Subchapter as long as the builder continues to hold the property for sale. 

The exclusion authorized by this program ends at the earlier of the following: 

(1) Five years from the time the improved property was first subject to being listed for taxation by the builder. 

(2) Issuance of a building permit. 

(3) Sale of the property.

Effective for taxable years imposed on or after July 1, 2019, a single application (PDF) is required for this exclusion.

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