2nd home property taxes (esp NH)

Cannonball · Feb 6, 2012

OK, so maybe the isn't the best forum for real estate advice. But I'm on here anyway and figure there are a lot of folks who own ski houses. I live in MA and am looking at buying a place in NH. My simple question is: Are property tax rates different for a 2nd home vs a primary residence. Especially as it applies to an out-of-state owner in NH.

Thanks!

PS: I'm not talking about how mortgages and prop taxes are deducted in tax filings, I think I have that one figured out. But that seems to be the only thing I can find info on (with admittedly very little effort so far).

riverc0il · Feb 6, 2012

I can't speak for non-primary residence homes specifically, but I can tell you that property taxes vary wildly town to town. So be sure to check with each town hall about their rates for every town you are shopping for homes. You might be able to get a cheaper home in one town but it might equal out in property taxes versus another town with a more expensive home and lower tax rates.

Cannonball · Feb 6, 2012

riverc0il said:
I can't speak for non-primary residence homes specifically, but I can tell you that property taxes vary wildly town to town. So be sure to check with each town hall about their rates for every town you are shopping for homes. You might be able to get a cheaper home in one town but it might equal out in property taxes versus another town with a more expensive home and lower tax rates.

Thanks for that tip. I have been paying very close attention to that. Especially in that Lincoln is extremely low compared to surrounding towns (Woodstock, Campton, etc). Actually Lincoln is pretty low compared to most of NH. I assume that this is mostly the result of stronger business tax base (Loon in Lincoln vs Woodstock). would you say that's true or are their other significant factors?

kickstand · Feb 6, 2012

Cannonball said:
OK, so maybe the isn't the best forum for real estate advice. But I'm on here anyway and figure there are a lot of folks who own ski houses. I live in MA and am looking at buying a place in NH. My simple question is: Are property tax rates different for a 2nd home vs a primary residence. Especially as it applies to an out-of-state owner in NH.

Thanks!

PS: I'm not talking about how mortgages and prop taxes are deducted in tax filings, I think I have that one figured out. But that seems to be the only thing I can find info on (with admittedly very little effort so far).

I don't believe they do. We own in Intervale, but live in Wakefield, MA. I think the tax rate is based solely on assessed value. We just got assessed a couple months ago. Apparently, they're supposed to do it every 5 years, but somehow Intervale (Bartlett) slipped thru the cracks. It was my first assessment in the 7 years I've owned. I can tell you Jackson, the next town over, is much higher than we are.

The only difference I can think of with a vacation property, as you mention, is how you handle it on your taxes. There are a few different ways to do that, but beware NH DOR. They are relentless.

deadheadskier · Feb 6, 2012

Cannonball said:
Thanks for that tip. I have been paying very close attention to that. Especially in that Lincoln is extremely low compared to surrounding towns (Woodstock, Campton, etc). Actually Lincoln is pretty low compared to most of NH. I assume that this is mostly the result of stronger business tax base (Loon in Lincoln vs Woodstock). would you say that's true or are their other significant factors?

that seems to be the case in the seacoast area. Our property tax rate is relatively high as there is very little industry in town, it's almost entirely residential. The tax rates in Portsmouth where there is strong industry are pretty reasonable. Of course both balance out a bit due to property valuation. You may pay a higher tax percentage in my town, but you get a lot more home for the $$$.

riverc0il · Feb 6, 2012

Cannonball said:
Thanks for that tip. I have been paying very close attention to that. Especially in that Lincoln is extremely low compared to surrounding towns (Woodstock, Campton, etc). Actually Lincoln is pretty low compared to most of NH. I assume that this is mostly the result of stronger business tax base (Loon in Lincoln vs Woodstock). would you say that's true or are their other significant factors?

I don't know if this is accurate, but when I looked at the tax rates, it seemed like tourism towns with lots of second home owners had lower rates than working towns without many second home owners. Plymouth taxes are through the roof, Ashland less so, and Holderness is even better as one example. Can't remember numbers. As I recall, the state is working to bring this in line somehow, can't remember the details. That could have changed since we bought though.

deadheadskier · Feb 6, 2012

I imagine the tax rate in Plymouth is high in part due to the presence of the University. The school requires a lot of public services and doesn't pay taxes.

Out of curiosity though, I looked up the rates. Plymouth pays only about $1.17 more per thousand than you do. There's a link to a Word file listing the rates for all NH towns at the following website:

http://www.revenue.nh.gov/munc_prop/2011PropertyTaxRatesRelatedData.htm

Geoff · Feb 6, 2012

deadheadskier said:
that seems to be the case in the seacoast area. Our property tax rate is relatively high as there is very little industry in town, it's almost entirely residential. The tax rates in Portsmouth where there is strong industry are pretty reasonable. Of course both balance out a bit due to property valuation. You may pay a higher tax percentage in my town, but you get a lot more home for the $$$.

Portsmouth is reasonable ($17.27 per thousand of valuation). New Castle is dirt cheap ($6.39 per thousand valuation).

Here is a link to the New Hampshire Dept of Revenue Administration WORD document with all the tax rates:
http://www.revenue.nh.gov/munc_prop/documents/2011taxratereport.doc

As a rule of thumb, towns that have lots of vacation homes or super-expensive waterfront property have low tax rates. Towns with lousy tax bases and a big school system pay outrageous taxes.

Jackson: $10.25
Bartlett: $10.48
Lincoln: $11.69
Waterville Valley: $11.20

Cannonball · Feb 6, 2012

Thanks all. FYI: the question comes as a result of an off-hand comment from an acquaintance who said "just watch out for your property tax rates, they're higher on a 2nd home". I wasn't able to follow up with him on that and haven't been able to find info. I'm starting to think he was referring to tax deductions....or just didn't know what he was talking about. Obviously I'll officially nail this all down before I commit to anything. But your quick input helps for sure.

deadheadskier · Feb 6, 2012

Geoff said:
Portsmouth is reasonable ($17.27 per thousand of valuation). New Castle is dirt cheap ($6.39 per thousand valuation).

Here is a link to the New Hampshire Dept of Revenue Administration WORD document with all the tax rates:
http://www.revenue.nh.gov/munc_prop/documents/2011taxratereport.doc

As a rule of thumb, towns that have lots of vacation homes or super-expensive waterfront property have low tax rates. Towns with lousy tax bases and a big school system pay outrageous taxes.

Jackson: $10.25
Bartlett: $10.48
Lincoln: $11.69
Waterville Valley: $11.20

Pretty much. Of course, you can't purchase a home in New Castle for under $600K.

Geoff · Feb 6, 2012

Cannonball said:
Thanks all. FYI: the question comes as a result of an off-hand comment from an acquaintance who said "just watch out for your property tax rates, they're higher on a 2nd home". I wasn't able to follow up with him on that and haven't been able to find info. I'm starting to think he was referring to tax deductions....or just didn't know what he was talking about. Obviously I'll officially nail this all down before I commit to anything. But your quick input helps for sure.

Vermont taxes vacation homes at the commercial rate for the state school tax. In a few of the resort towns, the strange and wonderful formula for computing the local resident school tax has it higher for residents than for vacation home owners. Killington and Stowe are like that. State-wide, all vacation home owners pay the same state school tax rate.

Cannonball · Feb 6, 2012

Geoff said:
Vermont taxes vacation homes at the commercial rate for the state school tax. In a few of the resort towns, the strange and wonderful formula for computing the local resident school tax has it higher for residents than for vacation home owners. Killington and Stowe are like that. State-wide, all vacation home owners pay the same state school tax rate.

Hmmm. That's interesting. So maybe that's where the original comment came from. Isn't sounding like the same is true in NH.

riverc0il · Feb 6, 2012

deadheadskier said:
I imagine the tax rate in Plymouth is high in part due to the presence of the University. The school requires a lot of public services and doesn't pay taxes.

From what I gather, Plymouth pays more because of their high school and public services, not the University. While the University does not pay taxes, the University contributes significantly to the towns revenues. As the largest shopping district between Tilton and Littleton and bringing in 4k undergrads and faculty to teach them and staff to support the University... the Universities contributions to revenues far exceed the additional expenses that the institution might entail. No University would mean far fewer tax paying residents, not as much health care development, no wally world, not as many stores, etc.

ctenidae · Feb 6, 2012

Some places give you an abatement on property taxes if it's your primary residence (Boston, for example). I don't know how NH is, though.

When I lived in NC the constant complaint on the Outer Banks was that non-residents didn't pay any tax, or paid less, or got to vote on the tax rates as residents (obviously voting against raises) so the tax base was terrible and there was no money for schools.

Cannonball · Feb 6, 2012

I could actually make either place be my primary residence. So I guess I should also be understanding how this relates to owning a 2nd home MA & primary in NH. Hmmm.

witch hobble · Feb 6, 2012

Plymouth tax rate is $20.21/$1000

witch hobble · Feb 6, 2012

Lots of residential educational infrastructure in Plymouth. Miles of sidewalk. Full police and fire/ems. Businesses to tax, yes. But far fewer second home owners, overall, than many of the smaller surrounding towns.

kickstand · Feb 7, 2012

kickstand said:
I can tell you Jackson, the next town over, is much higher than we are.

Well, I stand corrected. Bartlett and Jackson are within cents of each other. I swear when we bought Jackson was at least double what Bartlett was.

Thanks for the link, Geoff. Good stuff.....

Puck it · Feb 7, 2012

Cannonball said:
I could actually make either place be my primary residence. So I guess I should also be understanding how this relates to owning a 2nd home MA & primary in NH. Hmmm.

It may make sense for you to file separately if you are doing this. You may want to file in MA since you work there. And LA take the second home interest and she file in NH, since she works remotely. It may save the MA state taxes for her.

I would talk with a tax guy.

Remember the property tax in NH is only a federal deduction. And if you rent it the mortgage interest deduction gets complicated.

I have looked into buying a second home a few times but it is not cost prohibitive at this point for us.

Cannonball · Feb 7, 2012

Puck it said:
It may make sense for you to file separately if you are doing this. You may want to file in MA since you work there. And LA take the second home interest and she file in NH, since she works remotely. It may save the MA state taxes for her.

I would talk with a tax guy.

Remember the property tax in NH is only a federal deduction. And if you rent it the mortgage interest deduction gets complicated.

I have looked into buying a second home a few times but it is not cost prohibitive at this point for us.

Thanks. Good advice. I've been thinking along those lines too. The way our business are set up actually either one of can easily be MA or NH residents. But it's true that it may make sense for me to be in MA and her in NH.

We probably wouldn't rent. Our starting assumption is that we would only do it if we can afford to own it without having to rent it. If that is true then rental just becomes a bonus option.

2nd home property taxes (esp NH)

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