GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2005

H                                                                                                                                                    1

HOUSE BILL 648

Short Title:     Exempt Builder's Inventory.		(Public)
Sponsors:	Representatives Moore;  Culp, Current, and Starnes.
Referred to:	Finance.

March 16, 2005

A BILL TO BE ENTITLED

AN ACT to exempt from property tax the increase in value of real property held for sale by a builder, to the extent the increase is attributable to subdivision or improvements by the builder.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105-273 is amended by adding a new subdivision to read:

"(3a) 'Builder' means a taxpayer engaged in the business of buying real property, making improvements to it, and then reselling it."

SECTION 2.  Article 12 of Chapter 105 of the General Statutes is amended by adding a new section to read:

"§ 105-277.02.  Certain real property held for sale classified for taxation at reduced valuation.

Real property held for sale by a builder is designated a special class of property under authority of Section 2(2) of Article V of the North Carolina Constitution. 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 builder must apply for this exclusion annually as provided in G.S. 105-282.1. In appraising property classified under this section, the assessor shall specify what portion of the value is an increase attributable to subdivision or other improvement by the builder."

SECTION 3.  G.S. 105-287(d) reads as rewritten:

"(d)      Notwithstanding subsection (a), if a tract of land has been subdivided into lots and more than five acres of the tract remain unsold by the owner of the tract, the assessor may shall appraise the unsold portion as land acreage rather than as lots. A tract is considered subdivided into lots when the lots are located on streets laid out and open for travel and the lots have been sold or offered for sale as lots since the last appraisal of the property."

SECTION 4.  This act becomes effective for taxable years beginning on or after January 1, 2006.