Form AV-65, Builder Property Tax Exclusion, is the application a builder files with the county tax office to exclude from taxation the value that the builder's improvements add to real property held for sale. It is one of the Durham County property tax forms listed by Durham County Tax Administration among its Property Tax Relief Applications. On this page you can fill out the form online on FillingPDF and download or print the completed PDF; the form is filed with the county tax office, not with the NC Department of Revenue.
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What is AV-65?
Form AV-65, Builder Property Tax Exclusion, is the North Carolina application a builder submits to the county tax office to request that the increase in value from subdivision or improvements be excluded from property taxes while the builder holds the property for sale.
The form states that each improvement requires a one-time application under N.C.G.S. §105-282.1. It is built on G.S. 105-277.02, which makes residential and commercial real property held for sale by a builder a special class of property. G.S. 105-273(3a) defines a "builder" as a taxpayer engaged in the business of buying real property, making improvements to it, and then reselling it.
The statutes printed on the form set the limits of the exclusion:
- Residential real property: the exclusion covers value added by subdivision, improvements other than buildings, or construction of a new single-family residence or duplex by the builder. It lasts no more than three years from the time the improved property was first subject to being listed for taxation by the builder.
- Commercial real property: the exclusion covers value added by subdivision or other improvements by the builder. It ends at the earliest of five years from first listing, issuance of a building permit, or sale of the property.
The form collects owner and business details, builder qualification answers, the properties covered, the stage of construction as of January 1 of the year of application, sale status and occupancy, and an affirmation signed under penalties of law. The form is not a general tax exemption application for other situations.
Who needs to file AV-65?
A builder who holds real property for sale and has made improvements to it files Form AV-65 to claim the exclusion. The statute defines a builder as a taxpayer engaged in the business of buying real property, making improvements to it, and then reselling it.
Conditions printed on the form and its statutes:
- If the applicant is a general contractor, the form asks for the General Contractor License No.
- If the applicant is not a general contractor, the form asks whether the business is registered with the NC Secretary of State, the address of its principal place of business, how long it has been in the business of buying, improving and reselling real property, and how many properties it currently owns that are being improved or held for sale. Supporting documentation is attached as needed.
- For the residential exclusion, "residential real property" is property intended to be sold and used as an individual's residence. It excludes property occupied by a tenant or used for commercial purposes, such as residences shown to prospective buyers as models.
- Commercial real property intended to be sold and used for commercial purposes may also qualify under the commercial rules.
Every owner signs: all tenants of a tenancy in common must sign. The form warns that a transfer, or failure to meet the statutory qualifications, results in loss of the exclusion.
When to file AV-65
The form states that each improvement requires a one-time application, so you file Form AV-65 once for each improvement rather than every year. The statute notes that a one-time application is required for taxes imposed for taxable years beginning on or after July 1, 2019. The form asks for the tax year of the application and for the construction elements in place and the estimated percentage complete as of January 1 of that year. No separate due date is printed on the form itself.
How long the exclusion lasts depends on the property type. For residential property it runs while the builder continues to hold the property for sale, for no more than three years from the time it was first subject to being listed for taxation by the builder. For commercial property it ends at the earliest of five years from first listing, issuance of a building permit, or sale. The county tax assessor may contact you for more information after reviewing the application.
Documents you need
- Supporting documentation for the builder questions (a-d), attached as needed, if you are not a general contractor and must show you qualify as a builder under G.S. 105-273(3a).
- A list of the properties, attached if needed, when the property section of the form does not have enough room for all the property ID numbers and addresses covered by the application.
How to fill out AV-65
Enter the tax year and owner
Fill in Application for Tax Year, County, Owner(s), the mailing address, home and mobile phone numbers and the email address.
Add business and contact details
Enter the Business Trade Name, its mailing address, business and mobile phones, email and website. Add a Contact and phone only if the contact differs from the owner.
Answer the builder questions
Check whether the applicant is a general contractor and enter the General Contractor License No. if Yes. If No, answer questions a through d (Secretary of State registration, principal place of business, time in the business, and properties being improved or held for sale) and attach support as needed.
List the properties
Enter the Property ID # and Address/Location/Subdivision for each property, and check Yes or No under Improved? Attach a list if needed.
Identify the land type
Check Residential or Commercial. For a new project, check Subdivision, Single Family Residence or Duplex as applicable.
Describe the improvements
Answer whether improvements have been made, whether new improvements are under construction, and whether they were made after January 1, 2016. Enter the date site improvements began and the date of final site improvements.
Report construction status on January 1
Check the elements in place as of January 1 of the year of application (Grading/Site Preparation, Curb and Gutter, Streets, Single Family/Duplex, Utilities, Other) and enter the estimated percentage complete.
Give sale and occupancy status
Check whether the property is held for sale and enter the MLS # if Yes. Check the occupancy status (Rented, Occupied (Not receiving rent) or Vacant) and the name of the renter or occupant if any.
Sign and date the affirmation
Each owner signs with title and date; all tenants of a tenancy in common must sign. Leave the OFFICE USE ONLY box for the county.
Review and download the PDF
Check every entry against your records, then download or print the completed PDF from FillingPDF and deliver it to the county tax office as described under How to submit.
How to submit AV-65
Form AV-65 is submitted to the appropriate county tax office; the form tells you not to send it to the NC Department of Revenue.
- County tax office: deliver the signed application to the tax office of the county where the property is located. The form points to the list of county addresses at https://www.ncdor.gov/documents/north-carolina-county-assessors-list.
- Durham County: Durham County Tax Administration lists its main office at 201 East Main Street, 3rd Floor, Administration Bldg. II, Durham, NC 27701, open 8:30 AM-5:00 PM, telephone 919-560-0350. The form names no mailing, online or appointment option, so ask the office how it accepts applications.
Include the signed affirmation (all tenants in common must sign), any attached list of properties and any supporting documentation for the builder questions. After review, the county tax assessor may contact you for additional information. FillingPDF lets you fill out and download the PDF; submission follows the channels above.
Common mistakes to avoid
- Sending Form AV-65 to the NC Department of Revenue; the form says to remit it to the appropriate county tax office.
- Filing one application for several improvements; the form says each improvement requires a one-time application.
- Leaving out signatures: all tenants of a tenancy in common must sign the affirmation.
- Applying for the residential exclusion on property occupied by a tenant or used as a model home; the statute excludes such property.
- Skipping the General Contractor License No., or, when you are not a general contractor, the registration, business address, experience and property-count questions.
- Assuming the exclusion survives a sale or transfer; the form states that a transfer or failure to meet the qualifications results in loss of the exclusion.
- Expecting the commercial exclusion to continue after a building permit is issued; the statute ends it at that point.
- Reporting construction status as of today instead of as of January 1 of the year of application.
Frequently asked questions
What is Form AV-65, Builder Property Tax Exclusion?
It is the application a builder files with the county tax office to exclude value added by subdivision or improvements to real property held for sale. It rests on G.S. 105-277.02, and each improvement requires a one-time application under G.S. 105-282.1.
Who qualifies as a builder for the AV-65?
A builder is a taxpayer engaged in the business of buying real property, making improvements to it, and then reselling it (G.S. 105-273(3a)). Applicants who are not general contractors answer extra questions and attach supporting documentation as needed.
Where do I send Form AV-65 in Durham County?
Send it to the county tax office, not the NC Department of Revenue. Durham County Tax Administration's main office is at 201 East Main Street, 3rd Floor, Administration Bldg. II, Durham, NC 27701; call 919-560-0350 to confirm how it accepts applications.
How long does the builder property tax exclusion last?
Residential property: up to three years from when it was first subject to being listed for taxation by the builder, while held for sale. Commercial property: until the earliest of five years, issuance of a building permit, or sale.
Do I file Form AV-65 every year?
No. The form says each improvement requires a one-time application. The statute notes a one-time application is required for taxable years beginning on or after July 1, 2019.
Can I claim the exclusion on a rented or model home?
Not as residential property. The statute excludes property occupied by a tenant or used for commercial purposes, such as residences shown to prospective buyers as models. The form asks for occupancy status and the renter's name.
Who has to sign the AV-65?
The owner signs and dates the affirmation, and all tenants of a tenancy in common must sign. By signing you declare under penalties of law that the application is true and that you understand a transfer or failure to qualify ends the exclusion.
Can I fill out Form AV-65 online on FillingPDF?
Yes. You can fill out the PDF online on FillingPDF and download or print it. FillingPDF is an independent service and does not file the form; you deliver it to the county tax office yourself.
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