North Carolina Taxes for Wilmington Relocation Buyers

Taxes are one of the strongest reasons people relocate to Wilmington from higher-tax states. North Carolina taxes income at a single low flat rate, exempts Social Security entirely, and has no estate or inheritance tax. Property and sales taxes are set locally and remain moderate across New Hanover, Brunswick, and Pender counties. This page explains how each tax works for someone moving to the Cape Fear region. Tax figures change, so treat this as a starting point and confirm current numbers with the North Carolina Department of Revenue or a tax professional.

State income tax: a flat, falling rate

North Carolina does not use tax brackets. Everyone pays the same flat rate on taxable income: 4.25% for the 2025 tax year and 3.99% for 2026. By statute the rate is scheduled to keep dropping — to 3.49% in 2027 and 2.99% in 2028 — if the state hits its revenue targets. For someone arriving from a state with a progressive income tax topping 6%, 8%, or more, that flat low rate is a meaningful change in take-home pay and retirement-account withdrawals.

The standard deduction is generous: for 2025 it is $15,750 for single filers, $31,500 for married couples filing jointly, and $23,625 for heads of household. That means a married couple pays no state income tax on their first $31,500 of income.

Social Security and retirement income

North Carolina does not tax Social Security benefits or Railroad Retirement benefits, even if a portion is taxable on your federal return. Other retirement income — pensions, IRA and 401(k) withdrawals — is generally taxed at the flat state rate, with two important exceptions:

The Bailey exemption. Under the Bailey v. State of North Carolina settlement, North Carolina cannot tax retirement benefits from federal, North Carolina state, or North Carolina local government plans (including federal military pensions) if the retiree had at least five years of creditable service as of August 12, 1989. For long-tenured government and career-military retirees who qualify, this can make their pension entirely state-tax-free.

Military retirement pay. Separately, North Carolina now allows a deduction for military retirement pay for those who served at least 20 years or were medically retired, regardless of the 1989 Bailey date. This is a significant draw for the many military retirees who settle in the Wilmington area. See our military relocation page.

Property tax

North Carolina has no statewide property tax. Property tax is levied by your county and, if you live inside city limits, your municipality, expressed as a rate per $100 of assessed value. For fiscal year 2025–26 the county rates were approximately: New Hanover 30.6¢, Brunswick 34.20¢, and Pender 42.51¢ per $100. A home inside the City of Wilmington also pays the city rate (about 28.25¢ per $100 for FY2026) on top of the New Hanover County rate, so a Wilmington city homeowner's combined municipal-plus-county rate is roughly 58.85¢ per $100 before any fire or special districts.

Note that New Hanover County completed a property revaluation in 2025, which reset assessed values and lowered the nominal rate numbers, and both the county and the city were weighing rate changes in the June 2026 budget cycle. Always confirm the current adopted rate and your home's assessed value before relying on a specific figure.

Relief for older and disabled owners. North Carolina's elderly or disabled homestead exclusion can exclude the greater of $25,000 or 50% of a qualifying home's appraised value from taxation for owners who are 65 or older or totally and permanently disabled and who meet the income limit. Other programs exist for veterans and for long-term homeowners.

Sales tax

North Carolina's state sales tax rate is 4.75%. New Hanover, Brunswick, and Pender counties each add local sales taxes that bring the combined rate to 7.00%. Groceries are taxed at a reduced rate, and prescription drugs are exempt. Compared with many origin states, 7% is moderate.

Vehicle taxes

When you title a vehicle in North Carolina you pay a one-time 3% Highway Use Tax in place of sales tax. After that, you pay an annual vehicle property tax collected together with your registration renewal under the state's "Tag & Tax Together" program, calculated at your county's property tax rate based on the vehicle's value. Budget for that annual vehicle tax if you are coming from a state without one.

Estate and inheritance tax

North Carolina has neither an estate tax nor an inheritance tax. The state repealed its estate tax, so only the federal estate tax (which applies to very large estates) is a consideration. For retirees moving from states that levy their own estate or inheritance tax, this is a notable benefit.

How Wilmington taxes compare for a relocating buyer

Put together, the package is attractive: a low flat income tax that is still falling, no tax on Social Security, potential full exemptions for government and military pensions, no estate or inheritance tax, and moderate local property and sales taxes. Housing costs and coastal insurance — covered on our cost of living page — matter more to most relocation budgets than taxes do, but the tax climate is a genuine advantage over most Northeast and Mid-Atlantic states.

Frequently Asked Questions

What is North Carolina's income tax rate in 2026?

It is a flat 3.99% for the 2026 tax year (it was 4.25% in 2025), with further reductions to 3.49% in 2027 and 2.99% in 2028 scheduled if revenue targets are met.

Does North Carolina tax Social Security?

No. Social Security and Railroad Retirement benefits are exempt from North Carolina income tax.

Are military and government pensions taxed in North Carolina?

Often not. The Bailey settlement fully exempts qualifying federal, state, and local government pensions (including military) for those with five years of service as of August 12, 1989, and a separate deduction covers military retirement pay for 20-year and medically retired veterans.

What are the property tax rates in the Wilmington area?

For FY2025–26, roughly: New Hanover County 30.6¢, Brunswick 34.20¢, and Pender 42.51¢ per $100 of assessed value, plus a municipal rate (about 28.25¢) if you live inside the City of Wilmington. Rates and valuations change, so confirm the current figure.

What is the sales tax in New Hanover County?

The combined state and local sales tax rate is 7.00% in New Hanover, Brunswick, and Pender counties.

Does North Carolina have an estate or inheritance tax?

No. North Carolina has neither an estate tax nor an inheritance tax.

What vehicle taxes will I pay when I move to North Carolina?

A one-time 3% Highway Use Tax when you title the vehicle, plus an annual vehicle property tax collected with your registration at your county's rate.

Keep Reading

• Relocating to Wilmington: The Complete Guide
• Cost of Living in Wilmington
• Retiring in Wilmington
• Military Relocation

This page is general information, not tax advice. North Carolina tax rates and rules change frequently — verify current figures with the North Carolina Department of Revenue (ncdor.gov) or a licensed tax professional before making decisions.