NC House Bill 59 Proposes Property Tax Relief for Seniors and the Disabled

Legislation could significantly impact low-income seniors by alleviating financial challenges of homeownership amid rising costs, and shifting tax burdens to other property owners.

Holly Springs, NC, Feb. 6, 2025 — The North Carolina General Assembly is considering House Bill 59 (HB 59), titled "Expand Elderly/Disabled Homestead Exclusion," which aims to broaden property tax relief for elderly and disabled homeowners. If enacted, this legislation could significantly impact low-income seniors by alleviating the financial challenges of homeownership amid rising costs. While supporters view it as a necessary enhancement of tax relief, critics express concerns about potential revenue reductions for local governments and the possibility of shifting tax burdens to other property owners.

History and Purpose of HB 59

Introduced on February 6, 2025, by Representatives Erin Paré (Wake), Tricia Cotham (Mecklenburg), Jennifer Schietzelt (Union), and George Echevarria (Cumberland), HB 59 seeks to amend the current Elderly or Disabled Homestead Exclusion law. Presently, eligible homeowners can exclude up to $25,000 or 50% of their home's appraised value from taxation. The proposed bill increases the income eligibility limit from $37,900 to $48,000, effective for taxable years beginning on or after July 1, 2026.

Additionally, the bill introduces an alternative eligibility criterion: homeowners with incomes not exceeding 80% of the area's median income can qualify, provided they have owned and occupied their residence for the past 15 consecutive years.

Pros: A Lifeline for Seniors and the Disabled

Supporters of HB 59 argue that the bill provides essential financial relief for elderly and disabled homeowners, many of whom are on fixed incomes and struggle with rising property taxes. Expanding the homestead exclusion is seen as a means to enable more North Carolinians to age in place with dignity.

Beyond individual homeowners, proponents contend that HB 59 could help stabilize neighborhoods by preventing forced relocations due to unaffordable tax bills. Many seniors who have lived in their homes for decades face increasing tax rates due to rising property values, especially in urban and suburban areas experiencing growth and redevelopment.

Cons: Potential Budgetary and Tax Implications

Critics caution that expanding property tax relief could decrease revenue for counties and municipalities. These entities rely on property taxes to fund essential services such as schools, law enforcement, and public infrastructure. A significant reduction in local property tax revenue could force counties to consider alternative funding strategies.

One possibility is a tax shift to other property owners. If revenue losses become substantial, local governments may need to increase property tax rates on non-exempt homeowners and businesses, placing a more significant financial burden on middle-income families who do not qualify for the exclusion.

At the state level, HB 59 does not currently provide a mechanism for compensating municipalities for the loss of tax revenue. If counties experience severe financial strain, they may request additional state funding, which could impact the overall state budget by requiring the reallocation of resources from other programs.

Additionally, critics express concern that the bill's income eligibility threshold may not be flexible enough to address regional disparities in the cost of living. While $48,000 may be a reasonable limit in rural North Carolina, it may be inadequate in high-cost urban areas like Raleigh or Charlotte, where property values and living expenses are significantly higher.

Potential Economic Effects

HB 59 could have broader economic implications beyond the housing market. The bill could help seniors remain in their homes longer, potentially reducing the strain on public housing and social services. However, if other taxpayers face higher rates, consumer spending and real estate investment could decline, slowing economic growth in affected communities.

Areas with higher concentrations of eligible homeowners—such as retirement-heavy counties—may face more substantial revenue losses, leading to service reductions or increased reliance on alternative funding sources such as sales taxes or fees.

What Comes Next?

HB 59 has been referred to the House Finance Committee, where it will undergo further scrutiny and debate. If approved, it will move to the Rules, Calendar, and Operations of the House Committee before a full vote in the General Assembly. If it passes both chambers, it will take effect starting with taxable years beginning on or after July 1, 2026.

In the meantime, advocacy groups on both sides are mobilizing. Senior citizen organizations, disability rights advocates, and housing stability groups are lobbying for the bill. At the same time, some fiscal conservatives and county representatives push for amendments to mitigate revenue losses and ensure a sustainable financial strategy.

Conclusion

House Bill 59 represents a significant step toward easing financial pressures on North Carolina's elderly and disabled residents. While its potential benefits are clear, particularly for those struggling with rising property taxes, the bill also presents challenges in terms of funding, tax shifts, and economic implications. As the debate unfolds in the General Assembly, lawmakers must balance fiscal responsibility with the need to protect vulnerable homeowners from being taxed out of their communities.

The full impact of HB 59 remains uncertain, and policymakers must carefully consider its short-term benefits and long-term financial sustainability. Stay tuned for updates as the bill progresses through the legislative process.