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.
"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.