Property Taxes: Should NH Remain Free of Sales and Income Taxes?

Daphne Kenyon. This issue has been updated by LFDA editors.

This issue concerns the real property tax, which falls on land and buildings, and not personal property taxes or real estate transfer taxes.

New Hampshire is one of the few states in which both the state and local governments levy property taxes.

Property tax rates are applied to the assessed value of a property.  In practice assessed values can be above or below market value even though the standard of assessment in New Hampshire is 100 percent of market value. 

Tax rates in New Hampshire vary by town and have four components: town tax rate, local education tax rate, state education tax rate, and county tax rate.

New Hampshire tax rates are expressed as tax liability per $1,000 of equalized assessed local valuation ("value").  Municipal property tax rates for 2008 ranged from $4.68 for the Town of New Castle to $32.59 for the Town of Claremont. The median total tax rate was $18; at this rate, taxes due on real estate assessed at $200,000 would be $3,600.

Because not all towns assess properties at 100 percent of market value, it is important to distinguish between nominal and effective or full value rates.  Full value rates adjust property tax rates to take differing assessment/market sales ratios into account.  In 2007, the latest year available, full value tax rates ranged from $3.49 for Hale's Location to $31.93 for Berlin.

In 2006, total assessed value in the state was $15 billion.  Residential property accounted for the largest portion of assessed value (79 percent) followed by commercial and industrial property (16 percent).

All different kinds of property in New Hampshire are taxed uniformly, that is, at the same rate per $1,000 of value. For example, a single-family home is taxed at the same rate as an apartment building, a commercial building or industrial property.

Property taxes are used predominantly by local governments to finance schools, police and fire protection, trash collection, street maintenance, and public recreation, among other local services.  The state property tax is used to fund K-12 education. New Hampshire derives 61 percent of its total state-and local taxes from property taxation, compared to 31 percent for the average state.

The burden of real estate taxes on New Hampshire citizens, when compared to other states, is a matter of considerable debate, because this burden can be measured in various ways.  When effective property tax rates are considered, Manchester New Hampshire ranks between 13th and 45th among the each of the 50 states' largest cities, depending upon the type of property considered. When compared to personal income, in 2005 New Hampshire had the third largest property tax burden per capita at $2,034 per capita and the highest property tax burden as a share of personal income in the nation at $54.11 per $1,000 personal income.

A community's property tax rate is not a good measure of the property tax burden faced by the residents.  A new entrant into a community typically pays less for a home with a high tax rate.  This phenomenon is known as "tax capitalization."  Thus two homeowners in different communities can face very different tax rates, but the same cost of housing.  One homeowner can have high mortgage payments but a low property tax bill, while the other homeowner has low mortgage payments and a high property tax bill.

Some communities may have high property tax rates because they zone out commercial and industrial property and other communities have high property tax rates because they vote for more expansive government services.

Although widely assumed to be regressive, researchers agree that the property tax is not generally so, and, to the extent that it is a tax on capital, it can be progressive. Furthermore, the property tax is more progressive than the sales tax.

Average property tax burdens in New Hampshire today are similar to those of 40 years ago, constituting 5.4 percent of personal income in 2005, only slightly higher than 5.3 percent in 1962. Property tax burdens were highest in 1972 and 1992, when property taxes as a percent of personal income exceeded 6 percent.


"For" Position

By Daphne Kenyon

It is stable and responsive to economic growth:

  • It provides stable revenue. The property tax is more stable, for example, than a sales tax or income tax.
  • Property tax revenues tend to be responsive to economic growth.  For example, in New Hampshire in the 1970s and 80s, both population and total property values increased rapidly.

It is visible and promotes fiscal responsibility:

  • The visibility of the property tax may be beneficial as it allows taxpayers to weigh the benefits of government services against taxes paid thereby making government more efficient and more responsive to citizens. Hence it promotes local fiscal responsibility and civic engagement.
  • It is particularly suited to local governments, because they face difficulties when they try to tax a mobile tax base, and the property tax base is generally less mobile than sales or income.

Inequities are easily resolved:

  • States can address taxpayer inequities in real estate taxes with state-funded circuit breaker programs. States and communities generally provide for real estate tax relief for seniors and low-income tax-payers.

Taxpayers can adjust their taxes up or down:

  • Individuals can control their property taxes by choosing the property they own, and changing this property when appropriate. Other tax regimes do not give citizens that choice.

"Against" Position

By LFDA Editor

Communities with relatively low per capita property wealth are unfairly penalized:

  • Disparities in per-pupil property wealth in a community may lead to inequities in funding education for children or taxpayers. The same may be true for other municipal services.

Its relationship to taxpayer ability to pay is inexact: 

  • If a family's income is reduced through job loss, illness, or divorce, property tax liability is not reduced. When property taxes are increased, to pay for new schools or for other reasons, seniors or others whose incomes are not growing may find it difficult to afford to stay in their homes.

It unfairly affects economic development:

  • Heavy reliance on the property tax can lead to land use choices based mostly on revenue considerations.  For example, towns and cities sometimes zone against small and multi-family housing based on the assumption that affordable housing means more children, and more children means having to provide more schools, thus increasing already burdensome property taxes.

In NH the property tax is not in balance:

  • Relying too heavily on a single tax accentuates its weaknesses.  Since New Hampshire has no income or sales tax, it relies more heavily on the property tax than any other state.


Killed in the House

Adds information to property tax bills about the availability of property tax relief for low income residents

Killed in the House

Cuts property taxes for homeowners over 80 years-old who have lived in the home for at least five years

Killed in the House

Repeals the property tax exemption for the water and air pollution control facilities

In Committee

Increases the maximum amount of the optional veterans' property tax credit

Killed in the House

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

Killed in the House

Allows municipalities to adopt a property tax credit for elderly homeowners to the extent their tax bill exceeds 10 percent of income

Killed in the House

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 municipalities in Carroll County, which allows them to offer property tax exemptions to foster commercial and industrial construction

In Committee

Extending the veterans' property tax credit to 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.

Killed in the House

Uses tobacco tax and tobacco settlement funds to reduce the education property tax

In Committee

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.

Killed in the House

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.

Killed in the House

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.

Killed in the House

Allowing active duty service members to receive a property tax credit for veterans

Killed in the Senate

Creating a committee to study the impact of the property tax on businesses and residents

Killed in the Senate

Allowing towns to decrease the elderly property tax exemption if other income-earning adults live with the elderly resident

Signed by Governor

Making administrative changes to the meals and rooms tax, and establishing requirements and procedures for a municipality to calculate and set the applicable tax rates for property taxes

Killed in the House

Exempting 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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Mark Fernald
- Peterborough

Wed, 09/05/2012 - 11:49am

Ms. Kenyon needs to revisit some of her statistics and some of her assumptions.

From 1999 to 2011, the total property tax bill in NH doubled.  The property tax as a percentage of all taxes increased from 58% to 66%.

Using Manchester property tax rates to compare to other states is of limited usefulness because Manchester is a relatively low-spending, low tax city (despite what you hear from the Union Leader.)  If you compare the property tax rates of capital cities in each state, NH comes out at or near the top, because Concord is a place that puts more emphasis on funding its schools, and has high property taxes as a result.

Finally, the property tax is very regressive.  Retirees typically pay over 10% of their income in property tax, the middle pays about 6%, while the wealthy typically pay less than 2%.  Consider that we have many homeowners with incomes of, say, $30,000, living in average $200,000 homes.  Most of these people are retired.  We also have people with $300,000 incomes living in very nice $600,000 homes.  The second group has ten times the income as the first, but they don't have ten times the house, so they don't pay ten times the tax.  A better example of regressive taxation would be hard to find.

Mark Fernald

P.S.  Here are the figures showing that property taxes have risen to over 66% of all taxes in NH.

Fiscal 2011 taxes (including 2011 property tax year)

Property tax:                          $3,147,915,082

Beer tax:                                    $12,900,000

Business Profits Tax:                $297,801,000

Business Enterprise Tax:           $192,404,000

Estate and Legacy Tax:                     $92,000

Insurance Tax:                            $84,902,000

Securities Tax:                            $37,025,000

Interest and Dividends Tax:          $76,597,000

Meals and Rooms Tax:              $235,541,000

Dog Racing:                                    $329,000

Horse Racing:                              $1,005,000

Gambling Winning Tax:                 $3,188,000

Games of Chance:                        $1,136,000

Real Estate Transfer Tax:            $81,962,000

Telecommunications Tax:            $76,500,000

Tobacco Tax:                            $226,654,000

Utilities Tax:                                 $5,955,000

Gas Tax:                                  $124,967,000

Auto Registration (not really a tax) $132,132,000

TOTAL:                                    $4,739,005,082

Property tax is 66.4%.  This will be higher once we have the property tax figures for 2012, and the state tax figures for fiscal 2012, as the property tax has most-assuredly risen again, while state tax revenues have been flat.

Joseph S. Haas
- Concord

Tue, 02/24/2015 - 9:33am

The time to file this is by the March 1st deadline, and since it falls on a Sunday this year, of this is extended to the end of the business day on Monday, March 2nd.


The Eby case of June 13th, 2014 was alerted to me by one of the three Selectmen in my town. See: over to: and and in particular: pages: 4, 10 + 18-19 of 19 in that you can argue: (1) the un-constitutionality of a statute, as the state-wide tax for education IS unlawful as against Article 5, Part 2, and/or (2) whether any such statute is unlawfully being applied against you, as it is for me in that my religion is Protestant / Congregational.


In my Bible it reads of to loan to the poor at zero interest expecting nothing back. So when the town selectmen (assessors) do presume or assume (ass-u-me) that I have RSA Chapter 80:60 "committed" my property to be taxed for such, they are WRONG and I tell them so, BOTH verbally AND in writing, and by the Application process too since they REFUSED to seek an "advise and consent" from the Executive Council as required by Article 5 - Part 2, N.H. Constitution. BEFORE they send out their Tax Warrant to the Tax Collector to bill and collect.  Such "advise AND consent" of BOTH of thus needed beyond any deviousness by saying that of some "implied consent" by mis-applying Article 1 for an in-direct rather than a direct, in that it has to in-clude that of "advise" too!  Get it? Not only at the town level, but supposed to be at the state level too since although Stephan W. Hamilton there at the State Dept. of Revenue Administration (D.R.A.) calls them "Tax Rates" he sends to all the municipalities in this state, it is really an RSA Ch. 198:41,II(b) "tax warrant" (reference: page 2, line #33 in the current House Bill 680 before the "Ways and Means" Committee that had a Public Hearing on this last Friday, Feb. 20th @ from 11:51 - 1:02 p.m. See: to or also at: Both of us and more testified to such during that hour. )


Reference also that of BOTH: (a)  Vol. 55 N.H. REPORTS 503 @ page 505 (1875) of the Brentwood School District No. 2 case in Rockingham County and (b) Chapter 5 of Rose & Milton Friedman's best-selling book in 1980 entitled: "Free to Choose" that became an award-winning TV series too on PBS TV back then that I did read and watch back then too.


In the former it reads something like: "If the poor man or the poor child behaves himself honestly and uprightly, the state owes him the services of a schoolmaster and taxes the property of its more favored children in order to pay this debt that is like an exemplification of the law of Christian Charity." And in the latter of to subsidize the poor.  Milton Friedman won the Nobel Prize in Economics.  I had the prior words and cite on a poster in the window of one of my store tenants in Ashland, N.H. during a 1984 Town Tax Sale and after four years of the Town's application of all rents to public purposes (Plank #1 of The Communist Manifesto by Karl Marx) finally got a quitclaim deed from the Town in 1988. 


Nowadays its more basic than to turn your place into a church to tell them what you will pay, but to assert this religious right as supposed to be a guarantee by Article 5 Part First & N.H. Bill of Rights.  Everyone has their house within the town, and so I pay for the town and county slices of the property tax pie, but REFUSE to pay for the state and local school slices.  As for the local school tax, that is within the "District".  And the word district being territorial in nature is applicable as by the in personam, rather than the in rem, but by RSA Ch. 80:60- you can pretend, in-other-words lie that of to change that dictionary definition to include the land and buildings, but that is YOUR choice, of not supposed to be FORCED upon me! And so I do file the Abatement form to deduct these $amounts as an "any" good cause being such, since the word "any" by RSA Ch. 21:2 means ALL, but which the County Court judge in Merrimack County (Judge Larry Smukler) writes without any hearing(s) on appeals means LIMIT-ed to only two reasons of: (1) poverty / in-ability to pay +/or (2) over-appraised value, (since these are the only two reasons that others had used in the past) then any appeals to there in the PAST be useless, BUT maybe not now by the Eby case.  Or to the B.T.L.A. / Board of Tax and Land Appeals. 


 IF your city or town does DENY you such an abatement.  At least you / we, as members here ought to at least TRY, PLEASE! of hopefully to get at least one in each of the eleven Superior Courts in this state to win, or appeal to the Supremes by the $260 filing fee too from court ($260 x 2 = $520!) as that be a mandatory appeal rather than the discretionary one from The BTLTA: (3-member board there appointed by the Supremes)  where the filing fee is only $65.00 but that one of us ought to go to there too.  All of this needed since my three State Legislators did REFUSE to re-present what I presented to them of to please put this into an LSR to a HB or at least ask this question to the Supremes by Article 74 of maybe this HB 680 can be Amended for such was what I told them last week, of they are on vacation this week, and so for us to anchor in our claims by March 1st. Would you please join me in this challenge  to cut our taxes to the lawful amount. And stop their parasitic tactics against us, in that even if after a civil trial by jury of supposedly owed over $1,500 in taxes, as a tax is really just a charge, of not a debt due and owing, that by the Morsell case of 1875 at the U.S. Supreme Court:91 U.S. 357, 23 LAW ED. @ page 437: " The lien arose from the power to issue a writ of elegit", or in other words for the so-called debtor to be squeezed down to half the freehold (or RSA Ch. 480:1-9 homestead estate ) to make payments therefrom until the debt be paid in full, of thus any Tax Sale be for only up to 50% and on this temporary basis. See also: Vol. 22 NH REPORTS 234-245 @ page 239 entitled:  Morrison v. Bedell out of Grafton County, December Term 1859: "...the books abound with authorities to show that debt is the proper form of action to recover a penalty or forfeiture created by statute."


Yours truly, - - Joe Haas

Joseph S. Haas
- Concord

Tue, 02/24/2015 - 9:35am

The N.H. Supreme Court has already ruled that: "  at: : for  The "Notable Cases" and "Educational Funding" footnote over to: "
 The majority holds today that the present system of taxation to provide funding to meet this constitutional duty violates part II, article 5 of the State Constitution, because it is not reasonable or proportional. " nor wholesome. 
Joseph S. Haas
- Concord

Sat, 02/28/2015 - 9:36am

Mission accomplished: Yesterday I did file the 5-page "ABATEMENT APPLICATION" (cover letter with 4-numbered pages) plus a copy of this Feb. 24th posting here on 2 pages of a printout and another page (last # 8) of the quoting from pages 4, 10 + 19 of the Eby case, with the Office workers for the Town Assessors/ Board of Selectmen in two towns where I own property.

Anybody else can do so too and ought to, if they want to take advantage of this in 2015 for the already over-paid school slices of the property taxes (local and state) in 2014.  This Eby case thanks to the Selectman in one town and where I talked about this in the other town with the 3-man Board last Fall where they invited Colin van Ostern, The Executive Councilor in to like Show Cause why he should not be found in contempt of the constitution and his RSA Chapter 92:2 oath of office for not doing his job of for the "advise and consent" needed by N.H. Article 5, Part the Second for HOW government is supposed to work, in that BEFORE any Tax Warrants are to issue (out of the DRA +/or the Selectmen/Assessors) this "shall" / must be done as a mandatory requirement, that really, thus ALL your property taxes charged against you be unlawful, but that I just go by this divide and conquer strategy, as I do agree to pay for the Town & County slices and did and do pay, but REFUSE on constitutional grounds both in the general and specific to pay those two school slices of the tax pie.  Here's what I printed at the bottom of page 2: "To please deduct the un-constitutional parts of both the local AND state-wide school slices of the tax pie as explained in the 2-page e-mail of this past Tue., Feb. 24th @ 3:07 p.m. and pages 4, 10 + 19 of the Eby case of June 13, 20-14 at the N.H. Supreme Court.
Here is a copy and paste of the parts of pages 4, 10  + 19 that I did Scotch-tape to the 8.5 x 11-inch page 8 of my application:
"We review the constitutionality of statutes de novo. N.H. Assoc. of Counties v. State of N.H., 158 N.H. 284, 288 (2009). “In reviewing a constitutional challenge to a legislative act, we presume the act to be constitutional and will not declare it invalid except on inescapable grounds; that is, unless a clear and substantial conflict exists between the act and the constitution.” City of Concord, 164 N.H. at 134. “A party may challenge the constitutionality of a statute by asserting a facial challenge, an as-applied challenge, or both.” Huckins v. McSweeney, ___ N.H. ___ (decided April 11, 2014) (quotation omitted). “A facial challenge is a head-on attack of a legislative judgment, an assertion that the challenged statute violates the Constitution in all, or virtually all, of its applications.” Id. (quotation omitted). “To prevail on a facial challenge to a statute, the challenger must establish that no set of circumstances exists under which the Act would be valid.” Id. (quotation omitted). “An as-applied challenge, on the other hand, concedes that the statute may be constitutional in many of its applications, but contends that it is not so under the particular circumstances of the case.” Id. (quotation and brackets omitted). III   "  4
"Where we have found that a tax was unfair, unreasonable, or disproportionate, the constitutional deficiency has been of a much different character than the one the petitioners allege here. See Claremont School Dist. v. Governor, 142 N.H. 462, 470-71 (1997) (holding that property tax was a state tax and was thus disproportionate, unreasonable, and unfair because of discrepancies in tax rates of up to 400% between school districts);  " 10
" In the case of a taxpayer challenge to the constitutionality of an assessed tax, such an alternative, statutory scheme exists. RSA 21-J:28-b (2012) sets forth procedures for a taxpayer to appeal a tax assessment made by the New Hampshire Department of Revenue Administration (DRA). Under the statute, following a petition for redetermination and subsequent petition for reconsideration, a “taxpayer may appeal such decision by written application to the board of tax and land appeals or the superior court.” RSA 21-J:28-b, IV. The statute limits the legal issues to be considered on appeal to those raised in the prior petitions for redetermination and reconsideration, “with the exception that the taxpayer may raise additional legal claims addressing constitutional issues.” Id. (emphasis added). The procedures outlined in RSA 21-J:28-a (dealing with the refund or credit of overpayment of taxes) and :28-b are “the exclusive method by which taxpayers may challenge their liability for any tax, or the application to them of any provision” of the statutes governing the DRA. RSA 21-J:28-a, VI (2012). " 19 
Anthony Skarkovitch
- Latham

Thu, 05/07/2015 - 10:59am

Everyone who is lamenting the high property taxes in NH seems to be forgetting a few important points. NH has the lowest sales tax rate of all the states, zero (a very regressive tax) and the lowest income tax rate of all the states (except for the few other states which also have no income tax). Doesn't this count for something? Shouldn't the issue be the extent to which NH taxes it citizens, not the rate of one particular form of tax?

CMcKenney's picture
Chuck McKenney

Sun, 11/22/2015 - 5:18pm

The state has published its 2015 tax rates. Those communities at the top:

  • Northumberland $34.69
  • Hopkinton $33.62
  • Allenstown $32.83



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Issue Status

Several bills related to property taxes have been proposed for the 2016-2017 session, including: 

  • a bill relative to the property tax exemption for disabled veterans
  • a bill relative to property taxes on public educational facilities
  • a bill that would establish a property tax credit for persons providing home care services for family members


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