About half. North Carolina’s effective property tax rate on owner-occupied housing is 0.66 percent against Pennsylvania’s 1.26 percent, on the Tax Foundation’s 2026 state figures, and there is no separate school district line on a North Carolina bill. The catch is that the savings do not stay saved: coastal insurance takes part of it, and if you are retired, North Carolina charges income tax on pension and IRA withdrawals that Pennsylvania did not.
This is the single most common tax question we get from Pennsylvania sellers, and the headline comparison is real. It is also the comparison that produces the most wrong budgets, because the two states collect their money in different places. Pennsylvania leans on property and spares retirement income. North Carolina does the reverse.
We work with buyers from the Philadelphia suburbs, the Lehigh Valley, Lancaster County and the Pittsburgh area most months. This is the version we give them before they make an offer.
How the two bills are built
In Pennsylvania your property tax comes from three separate taxing bodies, each with its own millage rate quoted per $1,000 of assessed value: the county, the municipality or township, and the school district. Assessment practice varies enormously between counties, and the school district line is usually the largest of the three, which is why a Pennsylvania homeowner tends to think of property tax as school tax. Check your own district’s millage with your county assessment office rather than from a statewide average, because the spread inside Pennsylvania is wider than the gap between the two states.
In North Carolina the bill is shorter. Property is appraised at 100 percent of market value, rates are quoted in cents per $100 of that value, and your bill is the county rate plus whatever municipal, fire district or EMS rate applies to the parcel. Schools are funded through the county budget rather than billed to you separately, so there is no school line to look up. You get one bill a year.
What your bill actually looks like here
- Effective property tax rate on owner-occupied housing: North Carolina 0.66 percent, Pennsylvania 1.26 percent Tax Foundation, 2026 state tax pages, read October 18, 2026
- New Hanover County 30.6 cents per $100, with the City of Wilmington adding 33.15 cents for a combined 63.75 cents New Hanover County fiscal 2026-2027 rates, reported by Port City Daily, July 10, 2026
- Pender County 73.75 cents per $100, held flat for fiscal 2026-2027 on a 4 to 1 vote, June 15, 2026 WECT, June 16, 2026; Port City Daily, June 19, 2026
- Brunswick County 34.2 cents per $100, tax year 2026, with municipal rates on top Brunswick County tax rates table, tax year 2026
- New Hanover County median sale price $464,000 for the three months ending September 2026 Our New Hanover County market update, September 2026 data
- About $2,958 a year on that median inside the Wilmington city limits at the combined 63.75-cent rate Our arithmetic on the rates above
- Individual income tax: North Carolina 3.99 percent flat, Pennsylvania 3.07 percent flat, with local income taxes also applying in some Pennsylvania jurisdictions Tax Foundation, 2026 state tax pages, read October 18, 2026
Run the same house through both states and the gap is clear enough. At Pennsylvania’s 1.26 percent effective rate a $464,000 house carries roughly $5,846 a year; at North Carolina’s 0.66 percent it carries roughly $3,062. Inside the Wilmington city limits the actual combined rate produces about $2,958 on that value. Call it a saving in the range of $2,800 a year, which is real money and the reason the question gets asked.
Then notice how much the county matters. Pender County’s 73.75 cents is more than double Brunswick County’s 34.2 cents and well above New Hanover’s 30.6 cents, before any town, fire or EMS rate is added. A Hampstead house and a Leland house at the same price do not carry the same tax bill, and buyers who shop by town rather than by county get surprised. Our New Hanover County market update tracks the prices those rates apply to, and our moving to Wilmington pages lay out the three-county geography. We have run the same comparison against New York and Ohio if you are weighing more than one origin state.
One structural difference to plan around: North Carolina resets its base all at once through revaluation rather than drifting upward every year. New Hanover County’s current values took effect January 1, 2025 and Brunswick County’s next revaluation takes effect January 1, 2027, on the two counties’ published reappraisal schedules. Pender County’s 2026 reappraisal was suspended for a year by Senate Bill 889, so the county built its fiscal 2026-2027 budget on 2025 valuations. If you buy into a county the year before a reappraisal, expect the number to move.
Where Pennsylvania wins: the income tax you are about to start paying
This is the part that costs retired Pennsylvanians money, and almost nobody raises it before the move. Pennsylvania’s personal income tax is levied at 3.07 percent on eight enumerated classes of income: compensation, interest, dividends, net profits from a business, net gains from dispositions of property, net income from rents and royalties, income through estates or trusts, and gambling and lottery winnings. Retirement plan distributions and Social Security are not on that list.
North Carolina taxes income at a flat 3.99 percent for taxable years after 2025. Social Security is effectively untaxed, because the taxable portion is deducted back out on the state return. Pension and IRA withdrawals are not, unless you are a vested government retiree covered by the Bailey settlement. So a retired couple drawing $90,000 of taxable income from an IRA pays nothing on it in Pennsylvania and roughly $3,591 a year in North Carolina. That is larger than the property tax saving in the paragraph above.
North Carolina’s property tax relief for older owners is narrow enough that most arriving retirees should assume they do not qualify. The Elderly or Disabled Homestead Exclusion carries a 2026 income eligibility limit of $38,800, and the alternative circuit breaker program uses $58,200, both from the Department of Revenue’s June 27, 2025 memorandum to county assessors. Apply if you are close; the county will not do it for you.
Where North Carolina wins besides property tax
Two things, and one of them is worth more than the property tax gap to some families.
North Carolina has no inheritance tax. Pennsylvania does, and it is assessed on the heir rather than the estate: 0 percent for a surviving spouse and for a parent inheriting from a child aged 21 or younger, 4.5 percent for children and other lineal heirs, 12 percent for siblings, and 15 percent for everyone else apart from charities and exempt institutions, with a 5 percent discount if the tax is paid within three months of death. If part of your reason for moving is what you leave to your children, that difference compounds against everything on this page.
North Carolina also has no local earned income tax. Pennsylvania’s flat 3.07 percent sits on top of local income taxes in many jurisdictions, which is why the headline comparison of 3.99 percent against 3.07 percent understates what a working household actually pays in Pennsylvania. If you are moving here with a job rather than a pension, run your own numbers on the combined state and local figure from the municipality you are leaving.
The counterweight is insurance, and it is substantial. The North Carolina Department of Insurance settlement announced January 17, 2025 approved increases of 16 percent on June 1, 2025 and 15.9 percent on June 1, 2026 for the beach territory covering New Hanover, Brunswick, Pender, Carteret and Onslow counties. A homeowners premium rising at that pace absorbs a property tax saving quickly, and flood insurance, where it applies, is a separate policy on top.
For a retired household the net can easily run the wrong way. Pennsylvania spares retirement income and taxes your house; North Carolina spares your house and taxes your withdrawals. A couple drawing heavily from an IRA can save around $2,800 a year on property tax and give back more than that in state income tax, and then give back more again in coastal insurance. We are not accountants and we do not pretend to be, so before you treat the move as a tax win, have a CPA who works in both states run your actual return both ways. The one group for whom the comparison is lopsided in North Carolina’s favor is working households with earned income in a high local-tax Pennsylvania municipality and heirs who would face the 4.5 percent or 12 percent inheritance rate. For everyone else it is closer than the headline rates suggest.
Related questions people also ask
Does North Carolina have a school tax separate from property tax?
No. North Carolina funds public schools through county budgets and state appropriations rather than through a separate school district levy on your tax bill. That is the structural difference Pennsylvania homeowners notice first, because the school district line is typically the largest part of a Pennsylvania bill. It does not mean schools are free, only that the cost is inside the county rate you already pay, and it is one reason North Carolina bills look simpler and shorter than the ones you are used to.
Does North Carolina tax pension and 401(k) income?
Yes, at the state’s flat individual income tax rate, with two important exceptions. Social Security benefits are effectively not taxed, because the federally taxable portion is deducted back out on the state return. And certain vested government retirees are exempt under the Bailey settlement, which covers qualifying state, local and federal retirement plans with service before a specific date. Everything else, including private pensions and traditional IRA and 401(k) withdrawals, is taxable, so ask your accountant to model your withdrawal plan before you assume a tax cut.
How often does North Carolina reassess property values?
On a county cycle rather than annually, which means your assessed value can sit unchanged for years and then move all at once. Counties set their own reappraisal schedules within the limits state law allows, so neighboring counties reset in different years, and a reappraisal can raise your bill even when the rate stays flat. Ask which year the county you are buying in last reappraised and when the next one takes effect, because buying the year before a reset is a different experience than buying the year after.
Before you compare states, compare counties. Price the same house in New Hanover, Brunswick and Pender at the actual rates above, add a real homeowners quote for each address, and put your expected IRA or pension withdrawals next to the 3.99 percent rate. That one page tells you more than any state ranking will. Send us the budget and the areas you are considering and we will build it with you, and we will say so plainly if the move is not the tax win you were told it was.
Sources: Tax Foundation, 2026 North Carolina and Pennsylvania tax rates and collections pages, read October 18, 2026. Pennsylvania Department of Revenue, personal income tax page, on the eight classes of taxable income and the 3.07 percent rate. Pennsylvania Department of Revenue, inheritance tax page, on the 0, 4.5, 12 and 15 percent rates and the 5 percent early-payment discount. New Hanover County fiscal 2026-2027 property tax rates, reported by Port City Daily, July 10, 2026. WECT, June 16, 2026, and Port City Daily, June 19, 2026, on the Pender County rate and Senate Bill 889. Brunswick County tax rates table, tax year 2026. New Hanover and Brunswick County published reappraisal schedules, as carried in our comparison of North Carolina and New York property taxes, October 10, 2026. NC Department of Revenue memorandum to county assessors, June 27, 2025, on the 2026 Elderly or Disabled Homestead Exclusion and circuit breaker income limits. NC Department of Insurance homeowners rate settlement, announced January 17, 2025. Our New Hanover County market update, three months ending September 2026.
