Jan242026
Real Estate Q&A Series

What’s the best way to split property tax responsibility when one co-owner paid past taxes and other co-owners say they also paid? – North Carolina

Short Answer

In North Carolina, the cleanest way to split past property taxes among co-owners is to treat taxes as a shared “carrying cost,” verify what was actually paid (and by whom) using county tax records and payment proof, and then reconcile the difference in writing as part of the deed-revision closing. If co-owners cannot agree, North Carolina law allows a paying co-owner to seek contribution and, in some situations, a lien or an adjustment through a partition proceeding.

Understanding the Problem

In North Carolina real estate co-ownership, the practical question is how to fairly allocate responsibility for past-due or previously paid property taxes when one co-owner claims to have carried the tax burden and other co-owners claim they paid too. The decision point is whether the co-owners can document and agree on a single, accurate tax-payment history for each parcel before signing revised deeds and sending documents back for recording. If agreement is not possible, the question becomes what legal process exists to force an accounting and allocate taxes among co-owners.

Apply the Law

North Carolina generally treats property taxes as a cost of preserving co-owned property. When one co-owner pays more than that person’s fair share of taxes, that co-owner may have a right to contribution (reimbursement) from the other co-owners. North Carolina also has a specific statute addressing what happens when one co-owner pays the entire tax bill: the overpayment can become a lien against the other co-owners’ shares, enforceable in partition or another appropriate court proceeding.

Key Requirements

  • Confirm the tax ledger for each parcel: Identify the tax years at issue, the amounts billed, and whether the county shows the taxes as paid, unpaid, or paid with interest/costs.
  • Prove who actually paid: Match each payment to a payer (bank record, canceled check, online payment receipt, closing statement, or other reliable proof) and avoid double-counting “reimbursements” between co-owners.
  • Allocate by ownership share (unless there is a written agreement): A common approach is to allocate taxes pro rata based on each co-owner’s percentage interest for the period being reconciled, then net out who owes whom.

What the Statutes Say

Analysis

Apply the Rule to the Facts: With multiple co-owners revising deeds across several parcels, the most reliable way to split past taxes is to build a parcel-by-parcel, year-by-year reconciliation using county tax records and payer proof, then net the numbers based on each co-owner’s intended percentage interest during each year. If one co-owner truly paid more than that person’s share, North Carolina law supports a contribution claim, and in some situations the overpayment can be treated like a lien against the others’ shares if a court proceeding becomes necessary. If multiple co-owners paid at different times, the reconciliation should credit each verified payment once and treat any transfers between co-owners as reimbursements, not additional tax payments.

Process & Timing

  1. Who gathers the proof: One designated co-owner (or counsel) collects records from all co-owners. Where: The county tax office records for each parcel, plus each payer’s bank/receipt records. What: A written reconciliation spreadsheet and a short written agreement stating the net amount owed (if any) and how it will be paid or credited. When: Before revised deeds are circulated for signature and recording, so out-of-state signers are not asked to sign multiple rounds of documents.
  2. Net and document the split: Allocate each year’s taxes by the co-owners’ ownership percentages for that year, subtract each person’s verified payments, and calculate a net “true-up” amount. If the deeds are being revised to change percentages, keep the tax true-up separate unless everyone clearly agrees to fold it into the overall settlement.
  3. If there is no agreement: Consider whether a partition proceeding is needed to force an accounting and allocation. In a partition case, the court can address contribution for carrying costs and may adjust shares or sale proceeds to account for contribution claims.

Exceptions & Pitfalls

  • “I paid” vs. “I reimbursed”: A common problem is double-counting—one person pays the county, another person reimburses that payer, and both later claim they “paid the taxes.” The reconciliation should separate (1) payments to the county from (2) reimbursements between co-owners.
  • Ownership shares changed over time: If interests shifted (or are being revised now), taxes should usually be allocated based on who owned what percentage during each tax year being reconciled, unless there is a clear written agreement using a different method.
  • Mixing multiple parcels together: Co-owners often lump payments together across parcels. The safer approach is to reconcile each parcel separately because each parcel has its own tax bill, tax year, and payment history.
  • Relying on memory instead of records: County tax records show whether taxes were paid and when; bank records show who paid. Without both, disputes tend to persist and delay deed execution and recording.
  • Assuming a deed fixes past tax disputes: Recording revised deeds changes title going forward, but it does not automatically resolve disagreements about who should reimburse whom for past taxes unless the co-owners also sign a written settlement of the tax accounting.

Conclusion

In North Carolina, the most workable way to split past property tax responsibility among co-owners is to verify the county tax payment history for each parcel, match each payment to reliable proof of who paid, and then allocate the taxes pro rata by ownership share and net out a single true-up amount in a written agreement. If co-owners cannot agree, a paying co-owner may pursue contribution and related relief in court, and in a partition case tax contribution is generally limited to taxes paid within the prior 10 years. Next step: prepare a parcel-by-parcel reconciliation and have all co-owners sign a written tax true-up before recording revised deeds.

Talk to a Real Estate Attorney

If co-owners are trying to finalize revised deeds but cannot agree on who paid past property taxes (or how to credit those payments), a real estate attorney can help document the payment history, draft a clear true-up agreement, and explain court options if agreement is not possible. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.

Category: Real Estate Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.