Property tax reform has drawn significant attention in North Carolina in the lead-up to the short session and remains a central issue as policymakers respond to concerns about rising tax bills across the state.
Those concerns are well-founded. In a recent analysis of North Carolina’s largest counties, property tax collections exceeded a benchmark tied to inflation and population growth by more than $2.6 billion over the past decade. On average, county property tax revenues grew 62 percent, while the benchmark would have allowed 51 percent growth.
In response, policymakers have begun advancing proposals to slow the growth of property taxes. The House Select Committee on Property Tax Reduction and Reform has proposed a constitutional amendment to establish a property tax levy limit that would cap the annual growth rate of property tax collections.
Now, the Senate has introduced Senate Bill 889, a more immediate measure affecting how recent property reappraisals are applied.
What Senate Bill 889 would do
For counties that conducted a property reappraisal effective January 1, 2026, the bill requires a temporary adjustment in the values used for tax purposes. For fiscal year (FY) 2026–27, those counties would be required to use the schedule of values from their previous reappraisal rather than the newly updated 2026 values.
Beginning in FY 2027–28, those same counties would use the 2026 reappraisal values until their next scheduled revaluation. In effect, the bill would create a one-year delay in implementing updated property values in a limited number of counties.
What Senate Bill 889 would not do
While Senate Bill 889 changes how property values are used in certain counties, it would not limit local governments’ ability to raise property tax revenue.
Most importantly, the bill would not prevent property taxes from increasing. Property tax bills are determined by both property values and tax rates. While this legislation temporarily affects the value side of that equation, it would not restrict local governments’ authority to adjust tax rates, meaning taxpayers could still see higher property tax bills.
The bill also would not affect every county. It would apply only to the 12 counties that conducted a reappraisal effective January 1, 2026, including Guilford and Buncombe. Counties that were not scheduled to revalue would see no impact.
Closing thoughts
Ultimately, Senate Bill 889 is best understood as a temporary measure. It delays the use of updated property values in certain counties but does not address the broader drivers of property tax growth.
According to a fiscal analysis of the bill, the delay would reduce local government revenues by about $10 million in FY 2026–27; however, that estimate assumes no offsetting increases in tax rates.
As lawmakers continue to consider more comprehensive reforms — such as a proposed constitutional amendment to establish a property tax levy limit — this proposal represents an early step in that process, providing a short-term adjustment while longer-term reforms are debated.
