Buy in Surf City if you want town water and sewer, a commercial district and a year-round town, and accept a 47.5 cent municipal tax rate for it. Buy in Topsail Beach if you want the quiet south end at 22.65 cents, and accept that the town runs water but not sewer, which is the trade most buyers do not see coming.
Both towns sit on the same 26-mile barrier island in Pender County, a few miles apart, reached by the same bridge. From a listing photo they look interchangeable. They are not, and the differences that matter are in the budget documents rather than the brochures.
We pull both towns’ adopted budgets for buyers every year, because on a barrier island the carrying cost of a house has less to do with the purchase price than people expect and a great deal to do with which town hall sends the bill. Here is what the current ones say.
The tax bill is not close
Surf City adopted a property tax rate of $0.475 per $100 of assessed value for fiscal year 2026-2027, a reduction of 5.5 cents from the prior rate of $0.53 (Town of Surf City FY 2026-2027 Budget Message and Budget Ordinance, June 30, 2026). Property taxes make up about 52% of the town’s General Fund revenue, and each penny on the rate yields roughly $221,100 against a tax base of $2,240,122,467.
Topsail Beach set its rate at 22.65 cents per $100 for the same year, split three ways: 14.87 cents for general government, 6.84 cents dedicated to the Beach, Inlet and Sound fund, and 0.94 cents for capital projects (Town of Topsail Beach FY 2026-2027 Manager’s Recommended Budget, submitted May 29, 2026). The town’s total assessed value is $1,631,140,040, and each penny is worth about $163,114 at a 95% collection rate.
On top of either town rate, both pay Pender County’s levy of 73.75 cents per $100 plus 9.25 cents for EMS (Pender County FY 2026-2027 budget ordinance). So the all-in rate runs about $1.31 per $100 in Surf City against about $1.06 in Topsail Beach. On a $700,000 assessment that is roughly $1,750 a year in difference, every year you own the house.
- Surf City property tax rate $0.475 per $100 for FY 2026-2027, down 5.5 cents from $0.53 Town of Surf City FY 2026-2027 Budget Ordinance, June 30, 2026
- Topsail Beach property tax rate 22.65 cents per $100, of which 6.84 cents is dedicated to beach, inlet and sound work Town of Topsail Beach FY 2026-2027 Manager’s Recommended Budget, May 29, 2026
- Surf City total budget $40,583,789, including a Sewer Enterprise Fund of $6,704,226, a Water Enterprise Fund of $4,146,251 and a Beach Nourishment Fund of $4,963,415 Town of Surf City FY 2026-2027 Budget Message, June 30, 2026
- Topsail Beach total budget $20,204,102.72 across all funds, including a $3,297,072.59 Beach, Inlet and Sound fund and a $1,481,050 water utility fund Town of Topsail Beach FY 2026-2027 Manager’s Recommended Budget, May 29, 2026
- Surf City population 3,894 in 2020, estimated at 4,998 in 2024; Topsail Beach reports “a little over 460 permanent residents” Both towns’ FY 2026-2027 budget documents
- Pender County median sale price $477,000, up 0.5% year over year, with 423 active listings and 76 days on market Our Pender County market update, three months ending August 2026
Sewer in Surf City, septic in Topsail Beach
This is the difference we spend the most time on with buyers, and it is the one that almost never appears in a listing.
Surf City runs both utilities as enterprise funds, budgeting $4,146,251 for water and $6,704,226 for sewer in FY 2026-2027, with water and sewer operations projected to generate $10,850,477 in revenue. You pay a utility bill and the town handles your wastewater.
Topsail Beach’s utility enterprise fund “focuses largely on the provision of water to our homes and businesses,” and the town’s own budget says efforts “to explore future options for both water and wastewater service continue” as it weighs growth and environmental concerns. In plain terms, the town supplies water and is still working on what wastewater service might eventually look like. For a buyer, that means you need to establish for the specific property how its wastewater is handled, and if the answer is a septic system, you need a septic inspection during due diligence and you own the replacement cost for the life of the house. On a barrier island lot, that is not a small line item.
The flip side is honest too. A septic system you maintain yourself has no monthly sewer bill attached to it, and Topsail Beach’s lower tax rate reflects a town that is not carrying a sewer system’s debt service.
Who each town is actually for
Strip away the money and these are two different products.
Surf City
Surf City is the island’s commercial center and the only one of the three towns with real year-round infrastructure: the restaurants, the shops, the pier, the grocery run that does not require crossing back to the mainland. It grew from 3,894 residents in 2020 to an estimated 4,998 in 2024, and the town budget is explicit that the growth is driving service demand. Its town limits span both Pender and Onslow counties. If you want a primary residence on the island, or a rental that books on amenities and walkability, this is the practical choice.
Topsail Beach
Topsail Beach is the quiet south end, with a little over 460 permanent residents and a deliberately thin commercial footprint. The town funds a 30-year Storm Damage Reduction Plan through its dedicated Beach, Inlet and Sound fund, financed by 6.84 cents of its tax rate plus accommodations tax revenue, with Pender County passing along 100% of the accommodations tax it collects here and another $180,000 for inlet and beach work in FY 2026-2027. It is a town that has decided what it is and budgeted to stay that way. If you want quiet, and you are comfortable driving for groceries, this is where buyers who already know the island tend to end up. Our Topsail Beach guide covers the neighborhoods and the price ranges in more detail.
What the 2026 revaluation freeze means if you buy now
There is a timing wrinkle on this island that affects both towns and will not last.
In June 2026 the General Assembly enacted Senate Bill 889, Session Law 2026-8, suspending implementation of the 2026 property revaluations in Pender and Onslow counties. Both towns had to revert to the earlier schedules of values and recalculate their rates, and Surf City delayed adopting its budget to do it (Town of Surf City FY 2026-2027 Budget Message, June 30, 2026). That is why Surf City’s rate came down 5.5 cents this year, and it is not because values fell.
What this means for you as a buyer is straightforward. The rates above are set against frozen 2025 values. When the revaluation is eventually implemented, assessed values on this island are likely to rise, and whether your tax bill rises with them depends on what the towns do with their rates at that point. Budget for the possibility rather than assuming this year’s number is permanent.
The tax rate comparison is real but it is not the whole carrying cost, and on a barrier island it is not even the biggest line. Insurance is. A wind and hail deductible written as a percentage of your dwelling coverage can mean a $12,000 out-of-pocket exposure on a $600,000 rebuild cost before coverage responds, and oceanfront exposure often runs at 5%. That dwarfs a $1,750 annual tax difference, and it applies in both towns. Read our breakdown of what it costs to insure a beach house in North Carolina and our note on the NC Beach Plan before you decide either town is affordable. One more complication: part of Surf City sits in Onslow County rather than Pender, so an Onslow-side Surf City address carries a different county rate than the arithmetic above, and you should confirm which county a specific parcel is in. And if neither town’s trade-offs appeal to you, the honest alternative is the mainland. Hampstead puts you about 22 minutes from the Surf City beach access, per the routing estimates in our Hampstead guide, with no municipal tax rate at all.
Related questions people also ask
Which is better for a vacation rental, Surf City or Topsail Beach?
Surf City generally rents more easily because renters can walk to restaurants, shops and the pier, and the town has a larger year-round services base supporting them. Topsail Beach rents well too, but it attracts a repeat family audience that comes for quiet rather than amenities, which tends to mean steadier bookings from returning guests and fewer last-minute ones. Before you buy for rental income in either town, confirm the current short-term rental rules with that specific town hall, because occupancy and permitting requirements are set locally and do change.
Do both towns pay for beach nourishment?
Yes, and both have set aside dedicated money for it rather than hoping for federal funds. Topsail Beach funds a Beach, Inlet and Sound fund from a specific portion of its property tax rate plus accommodations tax revenue, and Surf City maintains a separate Beach Nourishment Fund in its annual budget. The practical takeaway for a buyer is that part of your tax bill in either town is shoreline protection, which is a reason the rates are what they are.
Is Topsail Beach or Surf City closer to Wilmington?
Surf City is closer, because it sits mid-island at the bridge and Topsail Beach is further south down the island. Both are reached from Wilmington by US 17 and the Surf City bridge, so the real variable is not mileage but summer bridge traffic, which can add substantial time on a Friday or Saturday afternoon. If you will make the drive regularly, drive it once at the hour you would actually drive it before you commit to either town.
Pick the trade you can live with for ten years, not the one that looks better this month. If you want services, walkability and someone else handling wastewater, that is Surf City and you should budget the higher rate. If you want quiet and a lower tax bill and you are willing to own a septic system, that is Topsail Beach. Once you know which, we can pull the county, the flood zone and the wastewater situation on any specific parcel before you drive out. Start with what is active on our property search or our Pender County market update, and bring us your shortlist so we can go through it address by address with you.
Sources: Town of Surf City FY 2026-2027 Budget Message from Town Manager Kyle M. Breuer and FY 2026-2027 Budget Ordinance, June 30, 2026, read October 4, 2026. Town of Topsail Beach FY 2026-2027 Manager’s Recommended Budget, submitted May 29, 2026, read October 4, 2026. North Carolina Senate Bill 889, Session Law 2026-8, as described in the Town of Surf City FY 2026-2027 Budget Message. Pender County FY 2026-2027 budget ordinance. Our Pender County market update, Redfin data for the three months ending August 2026. NC Department of Insurance windstorm and hail consumer guidance, via our coastal insurance guide.
