Sen. Lazzara files bill in North Carolina Senate on property tax deferrals for development projects

A new bill filed by State Sen. Michael A. Lazzara seeks to facilitate private developer involvement by allowing tax deferrals on certain residential property improvements, according to the North Carolina State Senate.

The bill, filed as SB 695 on March 25 during the 2025 regular session, was formally listed with the short title: ‘Incent Development Finance District Funding.’

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill reenacts G.S. 105-277.1D to facilitate private developer involvement in certain development projects by allowing property tax deferrals on residential improvements in designated incentive districts. It designates a special class of property that includes new, unoccupied residences constructed by builders within these districts, which may comprise up to 5% of a local government unit’s total area. Builders can defer taxes on the increase in property value from such improvements until specific disqualifying events occur, such as transfer of ownership, occupancy, or after certain time periods. Mortgage provisions preventing tax deferral are void, and applications for relief must be filed during regular listing periods unless good cause for delay is shown. The act becomes effective for taxes imposed on or after July 1, 2025.

Of the two sponsors of this bill, Todd Johnson proposed the most bills (49) during the 2025 regular session.

Bills in North Carolina follow a multi-step process before becoming law. A lawmaker starts by filing a bill, which is assigned to a committee for review. The bill must be read three times in each chamber. If one chamber changes the bill after the other passes it, both must agree on the final version. Once both chambers approve the same bill, it goes to the governor, who has 10 days (or 30 if the legislature is not in session) to sign, veto, or let it become law without a signature.

You can read more about the bills and other measures here.

Lazzara, a Republican, was elected to the North Carolina State Senate in 2021 to represent the state’s 6th Senate district, replacing previous state senator Harry Brown.