Circuit Breaker Homestead Tax Deferment Program

Qualifications
This program (PDF) limits the amount of taxes one must pay annually on their permanent residence to a fixed percentage of their income. The amount of taxes above that percentage is deferred and does not have to be repaid until such time that a disqualifying event occurs.

Examples of disqualifying events would be:
  • Death
  • Exceeding income limit does not constitute a disqualifying event
  • The property is no longer the taxpayer’s permanent residence
  • Transfer of the property
Upon a disqualifying event, the last 3 years of deferred taxes plus interest become due and payable. To qualify, the income of the homeowner and spouse:
  • Deferred taxes are a lien on the property
  • For multiple owners - all owners must apply and qualify (estate by entirety does not count as multiple owners)
  • Income below $29,500 - taxes limited to 4% of income (requires annual application and income verification)
  • Income between $29,501 and $44,250 - taxes limited to 5% of income (requires annual application and income verification)
  • Income cannot exceed $44,250
  • Interest accrues on deferred taxes from the date they were originally due
  • Must be 65 years of age or totally and permanently disabled
  • Must be a North Carolina resident
  • Must have owned and occupied property as the owner’s permanent legal residence for the last 5 years
  • Rollback taxes are for the last 3 years preceding the current year of deferred taxes plus accrued interest

Identification
The Social Security number information is mandatory and will be used to establish the identification of the applicant, 42 U.S.C. Section 405(c)(2)(C)(i).