Understanding Property Taxes in New Hampshire
Potential movers to New Hampshire are often confused by the wide range of property tax rates across the state. In Claremont, for example, the property tax rate is $41 per $1000 of assessed value, while in Auburn, it's only around $21 per $1000 of assessed value. Why such a wide range? Well, there are several factors that influence property taxes that you should take into account when selecting the towns in which to house hunt.
Schools, Infrastructure and City Services
Property taxes are not necessarily a good indicator of good schools, infrastructure or city services. In fact, Auburn (mentioned above) with its low tax rate uses Derry schools, a very desirable district. The school portion of the town budget typically accounts for 60-75% of the property tax burden. Towns with good schools and lower tax burdens include Auburn, Alton, Rye, and Wolfeboro. Towns with colleges or universities (Henniker, Keene & Durham, to name a few) typically have relatively high taxes.
High taxes = big government. Often, high taxes correlate to an oversized local government.
While a high tax rate may be undesirable, a particular property may have a low assessed rate. The assessed rate (determined by the town and not by the list price of the home) determines the total tax burden: Property taxes = tax rate x assessed value. A high tax rate shouldn't necessarily disqualify a particular town from your list.
Property Tax Increases
Property taxes tend to increase gradually over time with the biggest increases coming from things like the construction of new schools or fire stations, or other general capital improvements to the town.
Saving on Property Taxes
One way to save money on property taxes is through tax credits. These vary widely from town to town, but some of the available credits can include credits for US military veterans, credits for senior citizens, and credits for those who are handicapped. Not every town offers these and the discounts tend to be small, but it's worth a call to your town's tax assessor office.
When house hunting, it's important to remember to look at each property as the sum of its parts, and not just look at one data point like property taxes.
Editor's Note: This article is the third installment in our real estate column, where the experts at Porcupine Real Estate share their answers to clients' frequently asked questions. You'll find information about local property tax rates and more in Porcupine Real Estate's New Hampshire Relocation Guide.
Tax Amount Map from Liberty 603.