New Hampshire has one of the lowest tax burdens in the country. According to Tax Foundation, it ranked 44th in the nation, with an average tax burden of 7.9%. That's because the state does not tax individual income and does not impose a sales tax. But it does rank among the highest when it comes to property tax. 

In New Hampshire, it is up to each county to determine its own property tax requirements and rate. The Municipal and Property Division maintains the fairness of each county assessment and collection process. The division is comprised of the Municipal Bureau and the Property Assessment Unit. The Municipal Bureau provides assistance on taxation to approximately 500 political subdivisions. The Property Assessment Unit oversees the assessment review process. The administration of the assessment occurs at the city and town level.

Average Property Taxes in New Hampshire

New Hampshire’s effective tax rate is 2.19%, which is third highest in the country. In general, property taxes are assessed based on the value of the property on April 1, and the tax bill is due in December. If you build property on May 1, it is not assessed until the following year.

As of 2018, Cheshire County had the highest property tax rate, including exemptions, according to SmartAsset. The current rate for that county was 2.64%, where the average home was valued at $187,300. The average annual tax payment for Cheshire County at that rate would be $4,949. By contrast, Carroll County residents, where the median home value was $227,300, averaged an annual tax payment of $2,966 at a rate of 1.30%.

Like surrounding states, New Hampshire does have certain statewide exemptions available for elderly, blind and disabled citizens. Qualifying veterans received a $50 basic credit. The surviving spouse of a someone killed while on active duty may receive an exemption between $700 and $2,000. A disabled veteran whose permanent residence is in the state may qualify for a $700 tax credit on his or her property. In certain cases, municipalities may increase the exemption. 

New Hampshire is known for its strong citizen legislature. In fact, New Hampshire has the second-largest legislature in the United States. It may, therefore, come as a surprise that New Hampshire boasts one of the highest effective property tax rates in the country. 

How Property Taxes Are Calculated in New Hampshire

Homeowners in New Hampshire can pay up to four different kinds of taxes: county, local, local school and a state education tax. The amount of tax is based on the full market value of the property. That is determined by an assessor, who appraises the value using a system that evaluates market and property data, not by visiting individual properties. Homeowners who dispute the result can file an appeal, which may result in a refund of the taxes that were overpaid. 

The amount of money that needs to be raised by taxes determines the tax rate in New Hampshire. This amount is divided by the local assessed property value to arrive at the rate. In other words, the calculation process backs into the tax rate. For example, if the annual town meeting establishes that it needs $700,000, then this amount is divided by the value of the assessed property. If the assessed property value is $25 million, then the tax rate is $28. The rate is expressed per $1,000 of valuation. Each property tax bill shows the assessed value of property and the tax rate. In 2014, property taxes accounted for the largest percentage of tax revenue for the state at $363.6 million out of $1.9 billion; business taxes accounted for the second-largest percentage of tax revenue at $330 million.

New Hampshire Property Taxes Compared to Surrounding States and the Nation

In general, New England states have higher property tax rates than the rest of the country. As of 2018, Maine was ranked 17th, with an effective tax rate of 1.32%. Vermont was ranked eighth, with an effective tax rate of 1.78%. Massachusetts was ranked 18th, with an effective tax rate of 1.21%. Due to the way New Hampshire calculates taxes, it is hard to determine if the high effective property tax rate is due to poor tax policies or a shortfall in revenue from the business sector.

The national average effective property tax rate is 1.21%, well above New Hampshire's rate. That means a home valued at $250,000 nationally would result in an average annual payment of $3,028. A home with the same value in the state of New Hampshire would cost $5,475 in annual taxes at the current rate of 2.19%. 

The New Hampshire Premium

Most property taxes in New Hampshire are collected based on the value of the property at its highest market value, not current use, which may explain the premium in New Hampshire. Actual or current use assessments are available for farmland, forest land and unproductive land. However, the landowner typically needs to have at least 10 acres of land. Taxes on timberland are assessed at a rate of 10% of the value of the standing timber on the property. Property taxes on the value of gravel or other material extracted and mined are assessed at a rate of two cents per cubic yard of earth.

The Bottom Line

New Hampshire may be a low-tax state, but that does not include the property taxes paid by homeowners. These are some of the highest in the country, and well above the national average. In this state, counties determine the tax requirements and the tax rate. 

Rhode Island Property Tax Guide

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