NH Property Taxes 101
First the good news. NH does not have a State Income Tax nor a Sales Tax. There is an 8% Meals and Rental Tax assessed upon patrons of hotels, restaurants and motor vehicle rentals. NH is an all season vacation destination. With the Atlantic ocean, the White Mountains and the Lakes Region all in close proximity, there is something for everyone and the State attracts many tourists. This is a great source of revenue for the State and this tax targets tourists. Residents also pay a VAT on registering their motor vehicles. There are also a Business Profits Tax and Business Enterprise Tax. These taxes go beyond the scope of this article. I want to focus on an explanation of the property tax system in NH.By NH law, the property tax year runs from April 1 to March 31. Most towns collect the taxes semi-annually. The first tax bill is mailed several weeks before a due date of say July 1. This first bill is based on 1/2 of the previous year's total tax bill. This first billing is also considered a partial payment towards the current year's tax bill. The reason for this is that the NH Department of Revenue Administration doesn't set the current year tax rate until around the end of October. Any increase or decrease in the total tax due for the current year will be reflected in the early December billing. For example lets say the 2005 property tax for a home was $8,000.00. The first 2006 tax bill will be $4,000.00 due around July 1 in our example. Now, it was determined, that taxes for the full current 2006 year will be $8,200.00. (An increase of $200.00 for the year). Our final bill due in early December will be $4,200.00. {8,200.00-4,000.00 (first billing)=4,200.00}. Taking this example to July 1, 2007, the first billing tax payment due will be $4,100.00. Again 1/2 of the previous year's bill of $8,200.00. This example is for explanation purposes only and isn't meant to represent any specific town or property.
Each town's property tax rate is shown as a factor dollar amount per thousand of assessed value. Property values for tax purposes are assessed individually per property by each town periodically. This amount is used for caculating the property tax only and can differ from market value, selling price or an appraised value of a home. Computing the tax for a home with an assessed value of $200,000.00 and a $20.00 tax rate would be as follows: 200,000 divided by 1000, multiplied by 20=$4000.00 for the yearly tax. The tax rate amount itself is actually a sum of four tax rates: Town, Local Education, State and County. The Education rate usually being the largest percentage. For a complete 2006 tax rate for each NH town click here.revenue.nh
From a practical viewpoint, here are a few suggestions when comparing town tax rates. It can be difficult, but try not to compare the face value of the tax rate amount between towns. Because of the differences in calculating the assessed values, the tax rate does not give a true comparison. A more accurate measure may be the total tax amount (between like homes) and even then there is no guarantee the rate will not change in the future. Generally speaking when searching for a home, have a price range, a location you're interested in and homes that compare is size, features and amenities you desire.
When you finally find your dream home, but still have a slight level of angst over the property taxes, seek consolation in the following two facts. First, always check with your tax professional, your property taxes may be tax deductible. Secondly, when taking into account the total tax picture, New Hampshire is number two only behind Alaska, in the states with the lowest tax burden!
