Taxes
Present-use value and the rollback tax
If the tract you are buying is enrolled in present-use value, there is a deferred tax balance sitting on it that does not appear on the listing. Whether it comes due at closing, and who pays it, is a negotiation you can only have if you know the number.
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What present-use value is
North Carolina lets qualifying agricultural, horticultural and forest land be assessed on what it is worth in that use rather than what it would fetch on the market. On a large rural tract that difference is substantial, and the tax saved each year is not forgiven. It is deferred, and it accumulates as a lien on the property.
When a disqualifying event happens, and a change of ownership to a buyer who does not continue the qualifying use is one, the deferred taxes for the preceding three fiscal years become due and payable under G.S. 105-277.4(c). Interest is not charged from the date of the sale. Under G.S. 105-277.1F it accrues as if each year's tax had been payable on the date it would originally have come due, so the oldest year carries the most.
What to do about it before you close
Ask the county tax office two things: whether the parcel is enrolled, and what deferred amount is currently carried on the account. Both are answerable from the public record and neither requires you to be the owner.
Then decide what you are doing with the land. If you intend to keep it in forestry or agriculture and you qualify, you may be able to continue the deferral rather than trigger it, which is a conversation with the assessor and, for forestry, usually a written forest management plan. If you are converting it to a homesite or a recreational property, assume it triggers and price it in.
This is a tax question with real money in it, and the answer depends on your circumstances as a buyer, not just on the parcel. A report can tell you the enrollment status and the deferred balance on the record. It cannot tell you what to do about it, and anyone who does so without knowing your situation is guessing. Take the numbers to your accountant or a North Carolina attorney.
Want the tax picture on a specific parcel?
An AVA Land Report pulls ownership, deed reference and county assessment from the public record. A Verified Report puts the present-use value question to the county tax office in writing and records the answer with the office, the respondent and the date, so what you have is an answer rather than an assumption.
Request a reportCounties: Hyde County · Pamlico County · Beaufort County · Craven County · Carteret County · Onslow County
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