Property taxes can play a major role in the process of determining where to reside. States such as New Mexico can make this less of a challenge based on their tax rates, and the property taxes in New Mexico are among some of the lowest in the nation. For those looking to save money on their overall mortgage payment, the state of New Mexico could be an appealing place to buy a home.

Estimating Your New Mexico Property Taxes

Property tax bills are delivered annually to citizens and are based on an annual appraisal of a home’s value by the county assessor. The property tax calculation for New Mexico property includes a rate calculation that considers assessment value, tax rate and millage, as noted below:

Value x Assessment Ratio x Millage Rate = Effective Property Tax

Once the county assessor has valued a home, its value is multiplied times an assessment ratio of approximately one-third, which decreases the total taxable value and is a standard procedure for most states. The millage rate of the property tax calculation is then used to determine the effective property tax, and millage rates are determined by each county. Millage conversion rates overall are typically 1/1,000 of a dollar for every one mill. In New Mexico, the average millage rate is 30, which translates to $30 for every $1,000 in assessed value.

Average Property Tax Rates

The property taxes on owner-occupied housing as a percentage of median home value in New Mexico were 0.7%, as of 2015. This number places New Mexico at 40th in that category among all states. However, while this ranking puts New Mexico in the lower quartile for effective tax on property, the state has one of the widest property tax rate ranges in the United States, with the highest property tax rate being in McKinley County at 0.93%, and the lowest tax rate in Catron County at 0.22%.

Comparison to Neighboring State Property Taxes

With broader terrain and less urbanization, New Mexico's property taxes are mostly lower than those of its neighboring states, which include Arizona, Utah, Colorado, Oklahoma and Texas. New Mexico ranked 40th in the United States in average effective tax rate on property at 0.73%. Only Colorado, a neighboring state, had a lower average effective tax rate on property than New Mexico, ranking 43rd with an effective property tax rate of 0.61%. Property tax rates in Arizona are slightly higher with an average of 0.8%, ranking 36th among all 50 states in 2015. Utah and New Mexico have highly comparable property tax rates, with Utah’s property tax rate average for 2015 at 0.68%, ranking 41st. The states along New Mexico's eastern border have some of the highest property tax rates in the nation; Oklahoma's average effective property tax rate at 0.86% ranks 29th in 2015 and Texas' average effective property tax rate of 1.9% ranks sixth.

Comparison to National Property Tax Rates

Ranking 40th among all 50 states in average effective property tax rates, New Mexico is in the lower quartile for state property tax. The average effective tax rate for the entire United States is 1.13%. In the United States, New Jersey ranks the highest in WalletHub’s 2016 survey on property taxes with an effective property tax rate of 2.29%. Hawaii ranks the lowest in the United States, with a paltry 0.28%.

Overall, while New Mexico property tax rates are fairly low, the state falls within a region of the United States that has a broadly dispersed property tax range. Property owners in New Mexico can enjoy many of the luxuries that the southwestern region of the United States provides, along with the benefit of lower effective property tax rates.

Oregon Property Tax Guide

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