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New Hampshire is known for having some of the highest property tax rates in the country, as these funds are used to finance local governments and other essential services or departments, such as education.
Below, we'll go through the fundamental principles governing property tax in New Hampshire and other vital considerations to ensure you pay your tax liability timeously and minimize your tax burden.
Understanding the Property Tax Bills in New Hampshire
Both local and state property taxes exist in New Hampshire. In reality, any purchased property may be subject to a maximum of four distinct property taxes, including those levied by the county, the town, the local school district, and the state.
Local assessors carry out annual appraisals to establish the value on which to base property taxes. These appraisals aim to determine the property's fair market value. Assessors typically do not physically assess the property. Based on property and market data, they calculate property values using mass appraisal methodologies.
New Hampshire acknowledges that the appraisal process is clearly flawed and that various regions have slightly varied appraisal practices. The state balances out county valuations to make up for variations in appraisals. In order to equalize the market value of the property across all places, a ratio needs to be applied to it. The state education tax rate, which differs in each city, is calculated using this ratio.
Homeowners who object to the valuation of their property may submit what is known as an abatement request. This usually results in a reconsideration of the valuation and the potential for a tax refund.
How Many Times a Year Do You Pay Property Tax in New Hampshire?
The "assessment year" for taxation in New Hampshire municipalities is the period from April 1st to March 31st of the next year. In New Hampshire, taxes are due in two installments on July 1st and December 1st (subject to a delay if tax bills are delivered after the deadline).
First Installment
The first installment is generally mailed out around the end of May and is due on July 1st. This first tax bill covers the period from April 1st to September 30th and is estimated based on the previous year's tax rate multiplied by the property's assessed value, divided by two.
Second Installment
The final bill is calculated using the new tax rate multiplied by the property's assessed value. The new tax rate is set by the State of New Hampshire Department of Revenue during the fall. Property owners usually receive this bill toward the end of October and are liable for payment on December 1st. The second bill covers the period from October 1st to March 31st.
Consequences of Late Payments
From the due date until the date of payment, interest is charged on past-due taxes at a rate of 12% annually. Taxes levied against real property (land and buildings) are susceptible to a lien.
There is a lien placed on unpaid property before May 1st of the following year. The owner has two years from the date of the tax lien to redeem the property, at which time payment of the taxes, interest, and expenses will be acknowledged, and the lien will be lifted. Interest at the annual rate of 18% is assessed during the redemption term. The amount to be charged each year is equal to the amount appropriated or mandated by law to be raised for municipal expenses, less estimated receipts from other sources of available revenue.
How Much Is Property Tax in New Hampshire?
Property tax is the state's main tax. However, there is no cap on the amount or rate of this tax. All local, state, county, municipal, and educational expenses are covered by this single tax.
While New Hampshire doesn't have sales or personal income tax, it has quite high property taxes. In fact, it has the fourth-highest property tax rate in the US, which is 1.77%. Furthermore, its average property payments are also ranked third in the US. On average, New Hampshire homeowners pay approximately $6,097 for property tax.
If you're looking for a county with low property tax rates, you should consider Belknap County, Carroll County, Coos County, and Grafton County. Coos County has one of the lowest property tax rates, which is 1.34%. However, Cheshire County, Merrimack County, Rockingham County, and Sullivan County have some of the highest property tax rates in the state.
Calculating Property Taxes in New Hampshire
New Hampshire only levies property tax at the local level, which is calculated based on the three important elements:
- The tax rate
- Assessed value
- Property tax bill
Tax Rate
The tax rates in New Hampshire are set by the state and several municipal government bodies. Based on their individual budgetary demands, counties, towns, and school districts determine their own tariffs. One mill is equal to $1 of tax for each $1,000 of the property's assessed value. Tax rates are indicated in mills.
It is simplest to compare these taxes using the effective property tax rate rather than the mill rate because mill rates can vary greatly between counties and cities. An effective property tax rate is calculated as a proportion of the value of the home.
Assessed Value
The assessed value of each property is determined by a local tax assessor within a specific jurisdiction. An assessed value should be the equivalent of the fair market value of the property on a specified date.
Property Tax Bill
To calculate the annual tax bill, you need to multiply the property's assessed value by the local tax rate. Then, you would divide that answer by 1,000.
How Can I Lower My Property Taxes in New Hampshire?
As New Hampshire property taxes are considered some of the highest in the country, many people look for ways to reduce their tax liability. There are legal ways of doing this. However, you need to understand the applicable deductions, exemptions, and programs.
Deductions and Exemptions:
New Hampshire homeowners may be eligible for several deductions and exemptions under tax law. Some of the most common exemptions that eligible individuals receive include the Low and Moderate Income Homeowners Property Tax Relief program, the Elderly Exemption, and the Disabled Veteran Exemption.
Tax Appeal:
If you believe your property's assessed value is incorrect, you have the right to appeal the assessment. To find out more about the appeals process and relevant deadlines, make sure to contact the local assessor's office.
Consider Tax Relief Programs:
Each state has its own programs and incentives to help property owners reduce their tax burden. The Current Use Assessment, for example, gives landowners property tax relief if the land preserves open space - i.e. the land is specifically used for agriculture.
Final Words
New Hampshire is known for having some of the highest property tax bills in the US. This is partly due to the fact that this is an essential source of income for the local governments.
Therefore, it's vital to do your research and understand New Hampshire property taxes, payment dates, etc., to manage your tax liability appropriately. New Hampshire property tax rates vary based on county, city, and school district; hence, it's crucial to research the appropriate area you're considering investing in.
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