Today, we’re looking at how those same forces have impacted the approximately 60% of North Carolinians who live inside an incorporated city or town. Because if you live inside the city limits, the county taxes may only be half (or less) of what you pay every year.

Tax Rates’ Secondary Role

To start, let’s look at how the actual tax rate factors into your bill. When we looked at the county tax rates, what we found was that the actual tax rate was relatively unimportant in determining what you actually pay relative to the value of your home. The same holds true when you look at municipal taxes. The chart below plots the combined (county + city) change in the tax rate against the change in the estimated combined bill for each city and town in the state.

You’ll note that the dots form a giant blob, suggesting that there is very little relationship between the change in the tax rate and the change in the tax bill. You can see dots where the tax rate was cut substantially (more than 25 cents), and yet the tax bill increased by more than $2000. On the other hand, you can see places where the tax rate increased, and the effect was a negligible increase (or even a decrease) in the tax bill.

Put simply, knowing whether the tax rate went up or down tells you surprisingly little about what happened to the typical homeowner’s bill.

Watch Your Home Value

Contrast that with the relationship between the median home value and the tax bill, and the relationship is much clearer:

Municipalities with higher median home values generally experienced larger dollar increases in their estimated combined tax bills.

Part of that relationship is mathematical. Because the tax rate is applied to the assessed value of the property, changes in rates or values generally translate into larger dollar amounts on more expensive homes. A 25% increase on a $500,000 home adds much more taxable value than the same increase on a $150,000 home.

This does not mean that every high-value municipality experienced a large tax increase—the chart includes several notable exceptions—but home value is clearly more closely associated with the size of the bill increase than the tax-rate change alone.

Do Cities Follow Counties?

Another interesting question to consider is the relationship between city and county taxes. If a county raises taxes, how do the cities and towns in that county respond? The relationship is striking. The chart below compares the average change in county tax bills with the average change in municipal tax bills for the cities and towns within each county1. You can see that as county bills rise, so do city and town bills:

Counties with the largest increases generally also contain cities and towns with some of the largest increases. Obviously, not every municipality is following its county precisely (and you can see that variation around the trend line in the chart). However, the relationship here is much stronger than the one we saw between tax rates and tax bills.

If you want to get an idea of where your city tax bill is likely headed, there are two numbers to look at: the value of your home (particularly if you have gone through a re-val) and your county tax bill. My suspicion is that some of this is political. When a county approves a sizable tax increase, it may create a kind of “safe space” for the municipalities within it. City and town officials may be reluctant to exceed the county’s increase, but may be more comfortable approving an increase in the same general range.

There are less political explanations as well. A county and the municipalities within it are generally operating within the same housing market, revaluation cycle and regional economy. They may also be confronting similar pressures involving wages, construction costs, population growth and demand for services.

The chart tells us that county and municipal bills tend to move together. It cannot tell us exactly why—but the relationship is strong enough that your county tax bill may be a useful indicator of where your municipal bill is headed.

Where Does Your City Fall?

There are more than 540 municipalities in North Carolina, and I have all of their tax bill changes loaded into the map below. Larger circles represent larger increases, while the colors divide municipalities into five groups based on the size of the increase. The darkest blue represents the highest 20% of municipalities, while the lightest blue represents the lowest 20%. You can zoom in to compare how your city ranks relative to the cities and towns around it.

This table shows the 10 municipalities with the highest estimated combined county-and-municipal tax bills on a median-valued home. Each city-and-county combination is treated separately, so Chapel Hill appears twice because portions of the town are located in both Orange and Durham counties.:

On to Affordability

We’ve looked at how the size of property tax bills across the state has changed over the last 10 years, but what about people’s ability to pay them? After all, a $500 increase in one family’s tax bill might be an inconvenience, while that same increase for another family might be the difference in whether they stay in their home. Next, we’re going to look at how changes in income factor into all of this—and where property taxes may be becoming less affordable.

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The answer is more complicated than you might think.

Tax Rates Are Only Half the Story

Property tax bills are determined by two numbers: the assessed value of your home, and the tax rate set by your local county commissioners and city/town council (if you live inside the city limits). I focused only on the tax rates of the 100 counties in the state in order to keep things relatively simple (there are over 540 cities and towns in NC). The map below shows the change in the actual rate from July 1, 2016 to June 30, 2026 (you can roll over your county to see your local data):

Two things stand out right away. The first is that the counties with the largest rate reductions (in dark and light blue) also tend to be the counties that have experienced the fastest population and economic growth over the last 10 years. On the other hand, what is notable is that 20% of the counties in NC actually raised their rates over the last 10 years (dark orange), and another 20% effectively kept their rates flat (the lighter orange). These areas are clustered in the far western part of the state, as well as the northeastern corner of the state, and in the counties along the eastern stretch of US 74 between Charlotte and Wilmington.

The Importance of Home Values

The other half of the equation is, of course, the assessed value of your home, which varies considerably from county to county. The map below takes the median home value in 2016 and 2024 (which was the last year such data was available) and then multiplies it by the tax rate in 2016 and 2026 to calculate the change in the tax bill you would have received in each county.

There’s quite a bit of overlap with the previous map- a lot of the counties with the largest dollar increases are also those counties with the largest cuts in their rates. Mecklenburg County is actually a good illustration of this trend, cutting its tax rate by about 30 cents. However, the median property value surged from $192k to $406k, which resulted in tax bills increasing by 28% over ten years. Interestingly, Mecklenburg actually had one of the lower increases in tax bills among the urban counties, with most of the other urban counties seeing increases of 60+%, largely a result of the same property value trends.

Compare that to New Hanover County, which saw property values increase from $215k to $387k and had to cut its tax rate in half (from 62.3 cents to 30.6 cents) in order to keep tax bills at the same level.

The biggest takeaway is that tax rates are only part of the story. Many counties cut tax rates (some drastically), but homeowners still saw substantially larger tax bills as home values increased even faster. In many communities, rising home values are also accompanied by population growth and additional demand for schools, roads, police, fire protection, and other public services. And that all costs money. It isn’t a coincidence that the fastest growing counties are also seeing property taxes increase faster than average. What this suggests is that when you see the value of your home increase quickly, a larger tax bill is likely on the way, regardless of what the county commission does with the tax rate.

How Does Your Bill Stack Up?

The chart below shows the distribution of the current year’s tax bills by county, with a median value (across all 100 counties) just shy of $1200. Most counties cluster close to the statewide median, but there are a handful of outliers where the combination of rising property values and local tax rates has produced significantly higher tax bills.

What’s interesting is that there are about 10 outliers above the $2000 mark, and there are some unexpected entries on the list (which you can see below). It isn’t a clear red vs. blue or urban vs. rural breakdown.

Looking Ahead

This analysis looked at county taxes, but what happens when you layer municipal taxes on top? How do municipal taxes change the picture, and where is the combined city/county tax bill increasing the fastest? That’s where the story gets even more interesting. Subscribe below (for free) to get the latest analysis.

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And you are now the lucky landowner and prospector, finally ready to see what is really down there.

This newsletter will be your guide, as we plumb the previously unfathomable depths of state and local government across North Carolina. We will cover property taxes, budgeting, economic development, staffing, city/county operations, and everything in between.

What you’ll get is well-sourced and thoughtful analysis of the facts. Numbers and data come first here, and all analytics and conclusions flow downstream from there. There is no effort to push an agenda or other ulterior motives. In fact, we might look at the same data and draw completely different conclusions. And that is OK.

The goal of this project is to build up a more data-driven political culture in North Carolina. Whether you are a voter, elected official, journalist, public employee, or just someone interested in the numbers, this newsletter will help you to become more fluent in the data that is shaping communities across this state every day.

Let’s get started!