The Land of Enchantment lives up to its name in many ways, including great weather, stunning natural surroundings, an easy-going way of life, and a low cost of living. Investing in property here- either to live in yourself or to rent to others- is certainly an appealing prospect to many- but what about property taxes?
Everyone who owns real and personal property, including land, a residential home, a commercial building, or rental apartments, has to pay property tax in New Mexico. Luckily, the state has one of the lowest average rates in the nation, so it doesn't have to put you off living and owning property.
How much should you expect to pay, when are bills due, and how does the whole thing work? Knowing the answers can help you be better prepared for the annual cycle and stay on top of your property taxes.
This guide has everything you need to know, so keep reading to become a New Mexico property tax pro.
Types of Tax Bills in New Mexico
You will receive one tax bill each year for your New Mexico property that covers everything you owe. This includes tax for schools, which accounts for around 30% of the bill.
When Are Mexico Property Taxes Paid Annually?
Mexico property owners are expected to pay tax once per year, but you are allowed to do it in two installments.
The first half of your property tax bill is due on November 10th then there is a one-month grace period before they are overdue. Your first installment becomes delinquent at the close of business on December 10th.
The second installment is due to be paid on April 10th. Again, you have one month to clear your bill (until May 10th), then the outstanding amount becomes delinquent.
What Are the Consequences of Delinquent Property Tax Bills in New Mexico?
If you fail to pay either of your installments on time, you will be charged interest and penalties on top of the delinquent amount.
Every month beyond the due date, 1% interest is added, plus up to 5% of the debt as a penalty.
An unpaid tax bill of $1000 could be up to $1720 after 12 months- not including any additional fees and charges applied by your district.
Three years after the initial payment deadline, any properties with tax bills that are still unpaid go to a public auction held by the State Taxation and Revenue Department. Your property is sold to the highest bidder so the State can recover the money it is owed.
How to Pay a New Mexico Property Tax Bill
Most counties in New Mexico appoint the County Treasurer's Office as the designated tax collector. Payment methods can vary, but you can usually pay in person or by mail using a card, check, or cash.
Some counties also have an online payment facility to make it easier to pay your property taxes. Check your local government website for information about this service.
How Much Are Property Tax Bills in New Mexico?
Overall, New Mexico has a relative low average effective property tax rate and median payment. The national averages for the USA are 0.99% and $4950, respectively. In comparison, the average rate for New Mexico is 0.87%, and the median property tax bill is $3650.
That said, how much you can expect to pay varies between each New Mexico county since local governments are in charge of levying property tax rates based on the annual budgetary and revenue needs.
Examples of Property Tax Rates in New Mexico Counties
- Bernalillo County: New Mexico's largest county has a tax rate of 1.18% of a property's market value.
- Harding County: The lowest property tax rates in the state are in Harding County, at just 0.33%.
- McKinley County: Conversely, McKinley has the highest rate, with 2.79%.
Assessed Value and New Mexico Property Taxes
Property tax rates are only one part of how bills are determined. The other varying factor is the value of your property.
City governments and local tax authorities have county assessors who are responsible for working out the market value of every property in the area every year. They determine the full value of what your property would be worth on the fair market if it was sold as-is at that time.
You should receive an official notice of the value the county assessor has given your property by April 1st, and you have time to appeal the figure if you do not believe it is accurate. An over-estimated home value can mean you paying more tax than you should, so it is worth appealing if you have just cause to believe there has been an error.
Mill Rate and Taxable Value
Although tax rates are often expressed as a percentage of the market value, that is not actually how New Mexico property taxes work.
Property taxes in New Mexico are expressed as a mill rate- meaning the dollars per $1000 of the taxable value of your property. The taxable value, or property total assessed value, is one-third of the market value given by the county assessor.
If you qualify for any exemptions (see more details below), that amount is deducted from the assessed value to determine the net taxable value before the mill rate is applied.
How Are Property Taxes Calculated in New Mexico?
What does all that mean? In short, the annual amount you owe in property taxes is one-third of your property's market value times the mill rate.
Here is an example of a calculation without exemptions. In this example, we will use a mill rate of 20 ($0.02 per $1000).
- Home value $300,000 x 1/3 = $100,000 (taxable value)
- Taxable value $100,000 x mill rate $0.02 = $2000 (property tax bill)
Can New Mexico Homeowners Reduce Their Property Tax?
You can't lower your tax rates, but you could end up paying less if you qualify for any allowable exemptions. Here are some examples of available exemptions you can apply for.
Head of Household Exemption / Homestead Exemption
If you are the primary owner of your family home and generate the bulk of the income for the household, you could be eligible for up to $2000 of the taxed assessed value of your property through the Head of Household Exemption.
Property Tax Rebate 65 + (New Mexico's Senior Citizen Exemption)
Over 65s who live in their property for at least six months of the year can apply for a reimbursement of up to $250 on the previous year's property tax bill.
There are multiple exemptions for veterans in New Mexico- including a 100% exemption for those who are completely legally disabled. Non-disabled veterans may also receive up to $4000 off their taxable value.
Property taxes are fairly low in New Mexico, but they vary depending on how much revenue local governments need to generate. Your county commission property tax division and County Treasurer's Office are generally the first ports of call for payments, appeals, and information- but this guide provides an overview of the essentials.
Remember, your taxes can change annually if the net taxable value of your home is assessed at a different rate, so it is important to look out for communications and be prepared for appeals and payments when they are due.
Paying property tax is a law, and the consequences of breaking it can be severe. Stay informed, stay prepared, and keep enjoying life as a homeowner or property investor in the Land of Enchantment.