Beach Nourishment Financing/Taxes

Beach Nourishment Municipal Service District FAQs

Q. How much have my taxes increased?

A. A two-cent ad valorem tax increase on all Nags Head properties has brought the overall rate from 26.5 to 28.75 cents per $100 of valuation.  A portion of the overall tax rate is dedicated to beach nourishment.  The beach nourishment rate increased from 2.25 to 2.5 cents per $100 of valuation.  

The Board put additional MSDs into place to give the Town more flexibility for future beach nourishment activities. Tax rates were adopted for the Town’s six beach nourishment municipal service districts (MSD), four of which were newly adopted in June 2021 to establish a more sustainable funding plan. The supplementary revenue from the new tax formula will build up the Town’s beach nourishment fund balance to support future projects and provide more stability for future tax rates. 

One cent was added to MSD 4, bringing the overall rate to 1.0 cent per $100 of valuation. One half (.5) cent was added to MSDs 3 and 6, bringing the overall rate to .5 cent per $100 of valuation. No tax rate was established at this time for MSD 5.  There were no changes to MSDs 1 and 2, which have been in place since 2011 and have a tax rate of 14.30 cents.

Q. My property is not on the beach. Why is it included in the additional MSDs?

A. The Board’s long-term goal is to create a more sustainable and proportional funding plan for future nourishments. This plan better recognizes the benefits of nourishment that extend well beyond the immediate oceanfront. Properties adjacent to, but not directly on the ocean, benefit from reduced overwash flooding and impacts to infrastructure such as streets, as well as increased property values due to their proximity to a well-maintained beach. In addition, our beach is a key piece of infrastructure from which all of us benefit. Finally, the supplementary revenue from the new tax formula will build up the Town’s beach nourishment fund balance to support future projects and provide more stability for future tax rates. 

Q. How long will these new districts be in place?

A. Since nourishment has been taking place since 2011, we do not anticipate the Town stopping the projects. Future nourishments require revenue; therefore these districts will remain in place until the Board of Commissioners decide otherwise.

Q. Why is my property in two districts? Will I be taxed twice for beach nourishment? 

A. If you own property south of Bonnett Street that is east of South Virginia Dare Trail or South Old Oregon Inlet Road, that property will be in two districts, your current district and one of the newly created districts. To include a property in an MSD, the project must be within the MSD boundaries. 

If your property is in one of our two current MSDS, you are paying an MSD tax of 14.30 cents now for the 2019 beach nourishment project. The debt on that project will be paid off in July 2024. To prepare for future projects, you will pay two separate beach nourishment taxes.   

Q. When is the next beach nourishment project?

A. The Town is currently working on a Hurricane Dorian beach restoration project that will place sand on the beach in south Nags Head (from about Jennette’s Pier south) in the summer of 2022. This project will be paid for primarily by FEMA and State of NC grants. 

Q. I don’t want to be a part of a municipal service district. What can I do?

Per state statute, property owners may petition the governing body to establish, exclude, or remove property from an MSD – Board must consider petitions at least once per year – a policy should be adopted to be consistent.