Fact Sheet: Limiting property tax revenue in the state constitution is a bad deal for North Carolinians

July 10, 2026

The NC General Assembly has placed a constitutional amendment on the November ballot that, if approved by voters, would require lawmakers to limit annual growth in local property tax revenue.¹

This is not a direct limit on property tax rates but a “levy limit” on the total property tax revenue local governments can collect. If revenue exceeds the limit, tax rates would automatically decrease, but an individual homeowner’s bill could still increase.²

The constitutional amendment is very vague, but if passed, it allows the state legislature to restrict local communities in ways that will likely erode public services, fail to address unaffordable property tax bills, and exacerbate inequities.

Property tax revenue provides over one-third of funding for local governments in NC — limits likely mean cuts to services we all rely on

Local governments fund things we all rely on: public school buildings, libraries, parks, emergency services, sidewalks, elections, and more. Property taxes are the largest source of funds used to pay for these services.³

Property taxes are especially important because they provide stable revenue, since property tends to hold its value over time.⁴ In North Carolina, counties and towns have few alternatives to pay for services for their residents — state law bans local income taxes, and limits their ability to raise sales taxes. States that have introduced property tax limits have seen local governments closing community pools, considering deep cuts to emergency services, cutting hours and staffing at libraries, and more.⁵

Property tax limits are another way for out-of-touch state lawmakers to restrict local communities’ freedom to make their own funding decisions

A statewide levy limit would empower state lawmakers, elected to gerrymandered districts that don’t represent North Carolina voters, to restrict local democratic decision-making. The amendment includes vague language about creating exceptions to state-imposed limits. But without more details, there’s no guarantee that local communities will have meaningful opportunities to decide their own future.

North Carolina’s counties, cities, and towns are already under strain because of state and federal cuts

Local budgets are already stretched thin from big new costs for key services like SNAP food assistance because of federal cuts that the state is passing onto counties.⁶

In states with property tax levy limits, local governments rely more on unstable state funding and user fees and fines that fall hardest on people with low incomes.⁷ North Carolina has its own state revenue crisis because of income tax cuts over the last 15 years, and local governments already struggle to make up for a lack of state funds.⁸ Wake County estimated that they could lower their property tax rate by over one third if it weren’t for budgetary holes left by the state.⁹

High property tax bills driven by rising home values can cause real problems with housing affordability, but a levy limit won’t fix them

A homeowner’s property tax bill depends both on their assessed home value and on the property tax rate. When home prices are rising rapidly, a new appraisal can mean a jump in tax payments that can strain people’s incomes and even spur displacement.¹⁰ To address the root of the problem, North Carolina needs to address high housing costs by expanding the supply of affordable housing, while also boosting workers’ incomes.

Research has also shown the appraisal process deepens economic and racial inequities. For example, Black homeowners are more likely than white homeowners to have their homes overvalued and less likely to appeal high valuations successfully.¹¹ More frequent appraisals, better data and staffing, and support for homeowners appealing valuations could reduce inequities and sudden tax increases. A levy limit would not.¹²

If lawmakers really wanted to address unaffordable property taxes, they could expand targeted relief programs without hurting local services

The NC General Assembly doesn’t need a constitutional amendment to ensure households with low and fixed incomes don’t spend too much of their income on property taxes. Existing statewide property tax relief programs are limited to people who are elderly or have disabilities and very low incomes, or are veterans with disabilities. Funding for these programs comes out of local budgets.¹³ The NCGA could expand eligibility for these programs using state funds, getting support to those who need it without compromising local services.

Renters with low incomes face the greatest challenges with housing affordability and pay property taxes through their rent. Levy limits don’t provide renters with immediate relief, but lawmakers could pass a property tax credit that would support renters and homeowners.¹⁴ Lawmakers could also curb commercial property tax exemptions that can put more pressure on tax revenue from homeowners.

Compared to targeted relief programs, levy limits provide little benefit to low-income homeowners but can mean big giveaways for wealthy property owners.¹⁵

	Annual savings with property tax levy limit	Annual savings with expanded property tax relief
Elderly homeowner with an annual income of $50,000 and an annual property tax bill of $2,200	$175	$1,100
Corporate owner of a luxury rental high rise	$125,000	$0

Property tax levy limits exacerbate existing inequities between wealthy and low-income households and between rural and urban counties

Property taxes are already regressive, meaning lower income households spend the largest share of their income on property taxes.¹⁶ But property tax limits often make the tax system even less equal. They generally give bigger benefits to wealthy property owners and disproportionately benefit white homeowners over Black and Latine homeowners.¹⁷

Levy limits can also widen the gaps between wealthy and low-income communities. They are indexed to current property tax revenue when the limit is passed, so wealthier areas that start from a larger tax base are at an advantage. Even when they exempt new construction, it doesn’t help low-wealth and rural counties that aren’t adding new buildings. Thirty-nine rural NC counties rely on property tax for over half of their general fund budget, and their local services could be especially hard hit by a levy limit.

There are far more effective and equitable responses to unaffordable property taxes that don’t undermine local budgets and community autonomy.

Fact Sheet: Limiting property tax revenue in the state constitution is a bad deal for North Carolinians

Property tax revenue provides over one-third of funding for local governments in NC — limits likely mean cuts to services we all rely on

Property tax limits are another way for out-of-touch state lawmakers to restrict local communities’ freedom to make their own funding decisions

North Carolina’s counties, cities, and towns are already under strain because of state and federal cuts

High property tax bills driven by rising home values can cause real problems with housing affordability, but a levy limit won’t fix them

If lawmakers really wanted to address unaffordable property taxes, they could expand targeted relief programs without hurting local services

Property tax levy limits exacerbate existing inequities between wealthy and low-income households and between rural and urban counties

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