Property Taxes

Real and Personal Property

Overview

Real and Personal Property within the jurisdiction of the State is subject to taxation. Ad Valorem Property Tax is the largest source of revenue for Orange County. Real property taxes are based on the value of real property, land, and structures. The Tax Administration Office ensures that property values are assessed uniformly and equitably among all property owners throughout the County.

Personal property tax applies to, but is not limited to, machinery and equipment, construction in progress, computer equipment, office furniture and fixtures, leasehold improvements, supplies, expensed items, unregistered motor vehicles, recreational vehicles, manufactured homes, aircrafts, watercrafts, and other property.

When estimating revenues, counties must consider the likelihood of failing to collect 100% of total taxes billed in a given year. In Orange County, the overall collection rate budgeted in FY 2017-18 was 99.10% and for FY 2018-19 is 99.20%. The County uses all property tax proceeds to fund General Fund expenditures.

Depending on a property's location in Orange County, additional municipal, fire, school, and other district tax rates may apply.

Appraisal and Revaluation

For real property, revaluation is the process of reappraising all real estate in the County to reflect the current market value and re-establish equity among properties that may have appreciated or depreciated in value at different rates since the County's last revaluation. This process is required by North Carolina law to take place at least once every eight years.

Currently, Orange County’s revaluation schedule includes reappraisal once every four years. The effective date of the most recent revaluation was January 1, 2017. All current tax assessments for real property reflect a market value as of that date. The next revaluation will be effective January 1, 2021, when tax assessments will be updated to reflect market value.

Personal property is appraised annually. In determining value, the appraiser considers among many factors the property’s replacement cost, sales price (of similar property), age, physical condition, productivity, remaining life, economic utility, and the effect of obsolescence on the property.

Motor Vehicle Property

Overview

Registered, classified motor vehicles within the jurisdiction of the State are subject to taxation. The Tax Administration Office is responsible for assessing the value of the vehicle according to uniform assessment standards created by the North Carolina Department of Revenue (NCDOR). After determining the taxable market value of the vehicle, NCDOR (or a third party contractor acting on its behalf) prepares a combined tax and registration notice for each registered and classified motor vehicle. This notice includes the taxes on the motor vehicle that are due to the County. The taxes are paid directly by the taxpayer to NCDOR, which then remits the appropriate amount of funds to Orange County once a month.

In 2005, the North Carolina General Assembly combined motor vehicle registration renewal and tax collection. Referred to as the Tag & Tax Together program, the law transfers responsibility of motor vehicle tax collection from individual counties to the North Carolina Division of Motor Vehicles (NCDMV). Tag and Tax Together formally began in 2013. Under this program, vehicle owners in the state are required to pay property taxes owed on their motor vehicles at the same time vehicles are registered annually with NCDMV.

Appraisal 

Motor Vehicle Property taxes are assessed based on the taxable market value of the vehicle as prescribed by N.C.G.S. 105-330.2. The appraiser finds the most probable price that a property would bring between a willing buyer and seller.

Certain motor vehicles are excluded from the provisions of registered classified motor vehicles, including but not limited to: unregistered motor vehicles; semi-trailers or trailers registered on a multi-year basis; manufactured homes; mobile classrooms; mobile offices; self-propelled property carrying vehicles; motor vehicles leased to a public service company, town, or city; motor vehicles owned by a church; for hire and rental passenger vehicles registered under N.C.G.S. 20-87; and motor vehicles issued permanent registration plates. These vehicles are exempt from taxation under the provisions of Classified Motor Vehicle Tax but may be subject to taxation under the provisions of other applicable NC laws.

The owner of a classified motor vehicle who claims an exemption or exclusion from tax under N.C.G.S. 105-330.3 is required to establish the vehicle is entitled to the exemption or exclusion. The owner may request exemption or exclusion of the classified motor vehicle by filing an application for exempt status with the Tax Administration Office within 30 days of the date taxes on the vehicle are due.