Changes the calculation of the statewide education property tax, from whatever level necessary to reach $363 million, to whatever level equal to $7,500 per student. The bill also changes how students are counted in each district, for example to include homeschool students. Lastly, this bill allows school boards to contract with religious schools - not just nonsectarian private schools - to provide education.
Property tax rates in New Hampshire vary greatly from town to town. They take the form of a dollar amount that you pay on every $1,000 of what your property is worth. In 2018, these rates ranged from a low of $3.30 in Hale’s Location to a high of $42.08 in Claremont.
You’ll see different types of property taxes on your tax bill:
- Statewide education, which is a state tax that helps fund public schools;
- County, which your county levies to pay for county services like jails, courts, and some community services;
- Local school, which funds the rest of the cost of public schools;
- Town or city, which pays for emergency services like police and fire, road maintenance, and other city or town expenses.
These are all added together to make up your total property tax.
How is your property tax calculated?
Your property tax is based on the assessed value of your property, which is calculated by your town assessor. The assessed value might not be quite the same as the purchase price of your home, or how much your realtor thinks the home is worth. In New Hampshire, assessed value and market value are usually pretty close to equal.
All four types of property tax are usually pulled together into a single bill, which comes from your city or town tax collector. As noted above, you pay your property tax rate on every $1,000 your property is assessed to be worth.
To calculate the property tax on your home:
- Enter your home’s value into a calculator.
- Divide by 1,000
- Multiply that by your total property tax rate.
For example, if your house is assessed at $300,000 and your total combined property tax rate is $20, you’d multiply 300 by 20 to get $6,000. That’s what you’d owe in property tax for the year.
The same rates apply to residential homes as to commercial or industrial properties.
Why do property tax rates in NH vary so much?
Property tax rates can be higher or lower in a given community for many reasons. Residents may vote for expanded services, like a new school or full-time fire department. Or towns may make more space for commercial and industrial development, which can potentially add more valuable, taxable property to a town’s pool without a big impact on town expenses.
However, property tax rates can also vary because of the value of property in a town. Towns with higher property values can raise more money with a lower tax rate. Towns with lower-value homes have to charge higher tax rates to generate the same amount of money.
The ongoing debate over property taxes
New Hampshire has no income or sales tax, and therefore relies very heavily on property taxes. If both state and local revenues are taken into account, property taxes make up 64.7% of money raised by the government. That’s the highest reliance on property taxes in the U.S.
Local government, which is funded almost entirely by property taxes, pays for many services in New Hampshire. This can mean that towns with higher property values find it easier to raise money for needed improvements than towns with lower property values. That’s a particularly contentious issue when it comes to funding public schools. Local property taxes foot the bulk of the bill for public education in New Hampshire. A series of lawsuits in the Granite State found that this system is unfair to towns with lower property values, like Claremont. That’s led to calls to change New Hampshire’s tax structure – though so far, there’s been no viable proposal for what that change might look like.
What you can do about property taxes
The most immediate way to impact your property tax rates is to pay attention to your town budget and zoning rules. Sit in on town meetings or talk to your aldermen, council or selectboard about spending priorities.
Hate New Hampshire’s current property tax system? Love it? With a study commission on school funding queued up for the next year, lawmakers will be debating this issue. Contact your elected officials to tell them what you think.
PROS & CONS
"NH should keep its current tax system.”
- New Hampshire’s lack of an income or sales tax is key to the “NH Advantage”, which makes the Granite State an attractive place to live and do business. While supporters argue that an income or sales tax could be used to offset property taxes, it would more likely give government carte blanche to increase spending. Just look at what happened in Connecticut.
- If property values rise or fall because of economic change, local and state government can adjust property tax rates to keep their revenues stable without having to pass a new law. That’s not the case with a sales or income tax, which generally have a set rate that can’t be changed without legislative action. If New Hampshire creates a sales or income tax to reduce its dependence on property tax, revenues might be more vulnerable to economic crashes.
- Property taxes are highly visible – homeowners see them as a lump sum on their tax bills each year. That’s not necessary the case with income taxes, which are withheld from each paycheck, or sales taxes, which accumulate in tiny amounts on many purchases. This visibility means property owners are more likely to thoughtfully consider what they’re getting for their money. That pressure forces government to be more efficient and more responsive to citizens’ needs and opinions.
- There are ways to address inequality in property taxes without creating a whole new tax. For example, the state could fund property tax breaks for seniors or low-income taxpayers to keep their tax bills more affordable. New Hampshire should consider these options before upending its whole tax system.
"NH should find other revenue sources so it relies less heavily on property taxes."
- New Hampshire’s reliance on property taxes means that lower income people here pay, on average, 9.1% of their income in taxes. Compare that to 3.0% of income in taxes paid by the top 1% of the state’s earners. New Hampshire should create a tax system that distributes the tax burden fairly instead of putting a heavier burden on poor families.
- New Hampshire relies heavily on property taxes to pay for services, particularly public schools. Because property values vary greatly from town to town, wealthier towns have a much easier time raising money for schools than towns with lower property values. This has created big differences in the quality of education from town to town. That’s unfair to New Hampshire’s children.
- If someone in a household loses a job, gets sick, divorces or dies, that household still owes the same property tax, which can be a real hardship. Property taxes can also increase because a town builds a new school or takes on other expenses. That can be rough for seniors or others whose income isn’t growing, making it difficult for them to afford to stay in their homes.
- Heavy reliance on property taxes can also impact town planning decisions such as whether to allow the development of more affordable housing. Planners will opt for policies that increase property tax revenue instead of thinking of what’s best for the community or for New Hampshire as a whole.
Increases the income limitations for the low and moderate income homeowners property tax relief program, and provides for future upward adjustment of the limitations according to the Consumer Price Index.
Allows municipalities to establish a cap on the education property tax for residents aged 65 and older, if the property has been the taxpayer's primary residence for at least 5 years and no school aged child has resided with the taxpayer for the last 5 years.
Requires municipalities to notify the property owner of changes in the assessed value.
Allows towns and cities to adopt an education property tax credit for individuals over 55 years of age who have no children in the public school system.
Changes the residency requirement for the elderly property tax exemption from 3 to 10 consecutive years.
Allows municipalities to adopt a property tax exemption for veterans who have been determined by the U.S. Department of Veterans Affairs to have a 100 percent, service-connected, total and permanent disability. The House amended the bill to instead establish a committee to study the use of property tax credits and exemptions to recognize the service of New Hampshire veterans.
Clarifies the property tax exemption for certain permanently and totally disabled veterans by referencing the definition of permanent total disability in the federal regulations.
Increases the thresholds for statewide education property tax rebates for low income homeowners.
Requires the state to reimburse municipalities for the value of all property tax credits and exemptions granted at the local level in the property tax year.
Establishes a methodology for the valuation for property tax purposes of electric, gas, and water utility company distribution assets, as requested by the commission to study utility property valuation.
Allows a municipality to grant a property tax exemption to construction projects on a case by case basis, according to public benefit. At the time of this bill's submission a municipal property tax exemption must apply to all projects uniformly within the municipality.
Gradually lowers the rate of the utility property tax and eventually repeals the tax altogether.
Repeals the statewide education property tax, which is required to raise $363 million a year, and instead directs the state to send $363 million from the general fund of all tax revenue to education funding.
Establishes a "working families property tax refund program" for a portion of state education property taxes paid by taxpayers who claimed the federal child and dependent care tax credit.
Allows towns and cities to adopt a 10% property tax credit for workforce housing. The House amended the bill to instead establish a committee to study the use of tax incentives for promoting development of dense workforce housing in community centers.
Requires municipalities to return any Statewide Education Property Tax to the state that exceeds the calculated cost of an adequate education.
Requires the Department of Environmental Services and the Department of Health and Human Services to establish a data sharing protocol regarding certain health and environmental information, particularly environmentally-triggered chronic illness. A conference committee amended the bill to clarify that campground owners are not responsible for collecting property taxes on recreational vehicles.
Allows cities and towns to adopt an exemption against the statewide property tax for residents over age sixty-five who have lived in town for at least thirty years.
Changes the interest rates on late and delinquent property tax payments from a fixed rate of 12% for pre-lien payments and 18% for post lien payments, to the annual underpayment rate determined by the Commissioner of Revenue Administration, based on the rate specified in the Internal Revenue Code. This would most likely lower the interest rates on late and delinquent property taxes. The Senate amended the bill to lower the interest rates on late and delinquent property tax payments to new fixed rates of 8% for pre-lien payments and 14% for post lien payments.
Allows towns and cities to require owners of business property to provide upon request income and expense information for purposes of determining market value.
Allows cities and towns to adopt a property tax exemption for totally and permanently disabled veterans. The Senate amended the bill to instead increase the optional local tax credit for service-connected total disability from $2,000 to $4,000.
Allows towns to adopt up to a $500 annual property tax credit for members of the New Hampshire national guard and armed forces reserves engaged in combat service.
Repeals the property tax exemption for recreational vehicles ("campers"). The Senate amended the bill to instead modify the tax. For example, the bill removes the requirement that exempt recreational vehicles have a valid motor vehicle registration and number plate. Also, under this bill campground owners would no longer have to provide local assessing officials with the name and address of recreational vehicles at the campground that fall within the tax exemption.
Increases the maximum property tax credit towns may adopt for veterans, from $500 to $1,000. The Senate amended the bill to increase the credit to just $750.
Prohibits the state from establishing any new property tax exemptions or credits unless they are fully funded by the state or approved by the local legislative body of the political subdivision.
Requires towns and cities to give notice to property owners when a property reassessment affecting the owner's appraisals for tax purposes is completed.
Enables municipalities to reduce the assessed value of qualifying historic residential structures based on an analysis completed by an architectural historian.
Allows towns and cities to adopt a system of monthly payments for owners of manufactured housing with delinquent property taxes.
Clarifies the current requirement that private use or occupancy of public property is subject to property taxation. This bill also allows local property tax exemptions for leases of publicly owned agricultural land.
Eliminates the requirement for municipalities to annually deduct the value of water and air pollution control equipment from property tax.
Establishes an option for a local sales tax, not to exceed 1.5%, with the purpose of reducing property taxes. The bill excludes some purchases from taxation, such as clothing and shoes under $175, funeral charges, motor fuels, etc.
Allows towns and cities to double the optional veterans' tax credit against property taxes.
Creates a statewide property tax refund for taxpayers who received the Federal Child and Dependent Care tax credit.
Changes the calculation of property taxes to use the assessed value from the prior year and tax rates from the prior year so that budgets can be adopted using known revenues.
Establishes a commission to study adaptation of the tax structure of the state to economic and demographic changes.
Reduces the business profits tax rate from 8.2% to 4%; repeals the business enterprise tax, statewide property tax, utility property tax, and interest and dividends tax; establishes an income tax of 3.95%; and requires the state pay 35% of contributions of retirement system employers to some members beginning in fiscal year 2021.
Allows a town or city to adopt a property tax exemption for persons who have installed an emergency stand-by generator for use by an elderly person or person with a medical necessity.
Requires assessing officials to make three attempts for an in-person inspection of property before applying a statistical update to an appraisal for property tax purposes.
Removes the authority of assessing officials to obtain an administrative inspection warrant to inspect property to complete an inventory or appraisal for purposes of property taxation.
Requires property tax bills to include an informational statement explaining that the taxpayer has the right to apply for an abatement if they disagree with the assessed value of the home.
Allows town and cities to adopt an additional exemption from property taxes for certain totally and permanently disabled veterans.
Establishes a commission to study taxability of lease interests in public property.
Makes the landowner liable for unpaid tax bills of manufactured housing owners.
Allows towns and cities to increase the optional tax credit for service-connected disability to 100% of the property tax.
Allows a municipality to adopt a property tax credit for home health care services of a family member.
Prohibits the execution of a tax lien for nonpayment of property taxes if the property is the primary personal residence of the taxpayer.
Establishes a property tax refund for taxpayers who claimed the federal child and dependent care tax credit.
Imposes a 2.25% retail sales tax. The bill also imposes a 2.25% use tax on the use or storage of property in New Hampshire when no sales tax has been paid. Use tax is imposed, for example, when a New Hampshire business buys property out of state tax-free and uses it in New Hampshire. It also applies when a business makes personal use of property that it has purchased for resale or has manufactured for sale. Sales for resale, casual sales, and sales of specific items such as gasoline, heating oil, medical supplies, and items of clothing under $175 are all exempt from taxation.
Makes various changes to the laws governing the statewide education property tax. In particular, this bill establishes the rate of the statewide education tax at $8 per 1,000 of the value of taxable property and transfers the authority to collect the education property tax from the municipalities to the Department of Revenue Administration. This bill establishes a homestead exemption from the education property tax for the first $250,000 of assessed value of homestead property. The bill also requires an annual transfer of $150,000,000 from the education trust fund to the general fund.
Adds information to property tax bills about the availability of property tax relief for low income residents.
Cuts property taxes for homeowners over 80 years-old who have lived in the home for at least five years.
Repeals the property tax exemption for the water and air pollution control facilities.
Increases the maximum amount of the optional veterans' property tax credit.
Allows a town or city to require that an applicant for the property tax exemption for the disabled be a resident of the town or city for 5 years rather than only a state resident for 5 years.
Allows municipalities to adopt a property tax credit for elderly homeowners to the extent their tax bill exceeds 10 percent of income.
Establishes a commission to study the impacts of the property tax on New Hampshire’s residents, businesses, municipalities, and economy.
Extends the property tax program in Coos County to all municipalities, which allows them to offer property tax exemptions to foster commercial and industrial construction. Before amendments, the bill would have only extended the program to Carroll County.
Enables towns and cities to adopt an additional veterans’ property tax credit for all honorably discharged veterans
Allows municipalities to extend the veterans property tax credit to residents who served for a period determined by the city or town of at least one year active duty in the armed forces, and to their surviving spouses. The bill also allows for a different tax credit amount to be applied for such veterans.
Uses tobacco tax and tobacco settlement funds to reduce the education property tax.
Increases the eligibility levels for the low and moderate income homeowners property tax relief. This bill also applies the interest and dividends tax to trusts, increases exemptions for the tax, and extends the interest and dividends tax to capital gains.
Creates a committee to study the impact of the property tax on businesses and residents.
Allows towns to decrease the elderly property tax exemption if other income-earning adults live with the elderly resident.
Makes administrative changes to the meals and rooms tax, and establishes requirements and procedures for a municipality to calculate and set the applicable tax rates for property taxes.
Allows active duty service members to receive a property tax credit for veterans.
Exempts parents from the education property tax if their children are not enrolled in public school.
Should NH continue to use property taxes instead of a new broad-based tax, such as an income tax?
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