When it comes to the burden of paying property taxes, New Hampshire ranks seventh among all states in a new report on single-family home assessments.
And the values of those homes continue to rise, with the statewide median sales price of a single-family home rising to $445,000 in March, the NH Association of Realtors reported.
Our neighbor to the south – Massachusetts – ranked lower on the property scale, at No. 18. Next door neighbor Vermont ranked fourth, while the Granite State’s neighbor to the east, Maine, ranked 21st.
ATTOM, a national curator of real estate data, measured the effective tax rate (the percentage, on average, of a property’s value paid annually in taxes) using tax data collected from tax assessor offices nationwide.
New Hampshire’s effective tax rate for 2022 came in at 1.28 percent.
New Jersey topped the ATTOM list at 1.79 percent, followed by Illinois, 1.78 percent, Connecticut, 1.57 percent, Vermont, 1.43 percent, Nebraska, 1.36 percent, and Pennsylvania, 1.29 percent.
According to the ATTOM data, New Hampshire’s effective tax burden in New Hampshire in 2022 increased by 2 percent over 2021. Total property taxes collected came to $2.612 billion in 2022, also a 2 percent increase over 2021.
ATTOM put the number of single-family homes in New Hampshire at 381,073 last year. The average assessed value on each of those homes was $534,689, and the average tax amount was $6,855.
“Property taxes continued their never-ending climb last year, with wide disparities continuing from one area of the country to another, connected to varying costs, services, and tax bases. But, on balance, the latest increase nationwide again was modest,” said Rob Barber, chief executive officer at ATTOM.
He added, “This year, local governments and school systems will face even greater challenges keeping taxes in check, given rising inflation rates and a growing number of commercial properties that could be eligible for tax reductions after suffering a surge of vacancies during the pandemic,” he added.
County-by-county overview
The irony in New Hampshire is that it prides itself in having no income or sales tax, yet it ranks high on property taxes. That means New Hampshire relies most heavily on the property tax to fund local services and public education.
The fact that the state constitution guarantees equity in the area of education has given rise to legal challenges over the years to how tax revenue is distributed. So-called property-poor municipalities argue they are less able to fund an adequate public education for their children than municipalities with a greater tax base, resulting in a greater tax burden. Two suits in this regard are currently pending.
This disparity is evident in the new ATTOM data, which offers a county-by-county look at values and taxes.
Rockingham County, the Seacoast region, for example, is the most property rich of the state’s 10 counties. The average estimated value of each single-family home in Rockingham County was $661,876 and the average tax was $8,054 in 2022.
Next up is Carroll County, the Mount Washington Valley area. Its average home value was $657,673 and the average tax was 4,514.
The others, in order:
According to ATTOM, states with the lowest effective tax rates in 2022 were Hawaii (0.30 percent), Alabama (0.37 percent), Arizona (0.39 percent), Colorado (0.40 percent), Tennessee (0.42 percent), Utah (0.44 percent), Nevada (0.44 percent), Idaho (0.46 percent), South Carolina (0.46 percent) and West Virginia (0.47 percent).
“Huge gaps in average tax bills around the U.S. remain in place,” Barber said. “Those disparities are heavily connected to differences in local government and school services, public employee wages, economies of scale between large and smaller towns and the amount of commercial properties that help shoulder the local tax burden. Depending on what prospective buyers want in a community and its school system, the gaps can have a big impact on how easy or hard it is to sell a home.”
High property taxes often dissuade home ownership because of how it affects the overall calculation of home affordability.
ATTOM, in a separate report last month, showed the difficulty of affording a home in New Hampshire and through the declining affordability index over the years.
The affordability index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home based on monthly price and income data. A value of 100 indicates that the typical median-income family has exactly enough money to qualify for a home. Any value below 100 means that a family may struggle to qualify for a mortgage on a home in a particular area. The lower the value, the greater the struggle to afford the mortgage.
In the state’s most populous counties – Hillsborough, Merrimack, Rockingham and Strafford – the affordability index was at or near 100 through 2020. But that started to slip in in the latter part of 2021 with the COVID pandemic. They really started to dive in Q2 2022.
In the fourth quarter of 2022, the affordability index was 73 for Hillsborough, 69 for Merrimack, 68 for Rockingham, and 68 for Stafford.
In the first quarter of 2023, according to ATTOM, the index was 77 for Hillsborough, 73 for Merrimack, 75 for Rockingham, and 67 for Strafford.
Those latest affordability numbers are better, but a long way from the indices from the first quarter of 2021: 109 for Hillsborough, 112 for Merrimack, 103 for Rockingham, and 107 for Strafford.
Latest real estate data
Meanwhile, the latest monthly trends report from the NH Association of Realtors shows the median sales price of a home in the state was $445,000 for the month of March, up 1.1 percent from the same period last year. The median price of a residential condominium in March was $360,000, an increase of 2.9 percent over last year.
Compared to last March, there were 13.2 percent fewer single family home sales and 28.2 percent fewer condo sales.
As it has for some time now, Rockingham County remains the priciest of the state’s 10 counties. A single-family home there had a median sales price of $599,950 in March, a 3.4 percent hike over last year. A not-so-close second was Carroll County at $480,000, followed by Hillsborough at $451,750, Belknap at $442,500, Merrimack at $414,250, Strafford at $400,000, Grafton at $372,000, Sullivan at $325,000, Cheshire at $325,000, and Coos at $215,000.
The NHAR said higher rates have continued to put downward pressure on sales prices.
Within Rockingham County, the Seacoast Board of Realtors also attributed a March slump in sales to higher mortgage interest rates. It reported that for the first three months of 2023, single-family sales are off 14 percent, though the median sale price is up 3.6 percent to $644,000. It said condominium sales are off 26.4 percent in the first quarter, but the monthly median sale price of $608,703 is up 14.8 percent from last year.
