Factors to determine property tax rates

Monadnock Ledger-Transcript
Published: 11/23/2022 8:40:53 AM
Modified: 11/23/2022 8:40:43 AM

Towns in the Monadnock region have released their 2022 tax rates. What this means for the property owner’s tax liability depends on the overall assessment value of properties in a town. 

Tax rates include $27.86 per $1,000 assessed valuation in Antrim, up from $26.07; $30.42 in Greenfield; $21.81 in Hancock; $25.76 in Peterborough; $22.10 in Lyndeborough; $25.84 in Francestown and $24.96 in Temple.

The New Hampshire Department of Revenue Administration (NHDRA) sets tax rates for cities and towns in New Hampshire beginning in October of each year. This comes on the heels of local property reappraisals many New Hampshire cities and towns have undertaken and which assessors are required by law to perform every five years. NHDRA oversees the assessment review process, but individual municipalities hire the assessors.

Tax rates are broken into four different components: the local municipal rate, the local school rate, the state education rate and the county rate. The rate is per $1,000 of assessed valuation. Property value is assessed at the market value on April 1 each year. Real estate values in New Hampshire have been on the rise since 2012, according to NHDRA, with the most-dramatic increase happening between 2019 and 2021. Due to that increase, many New Hampshire property-owners have seen dramatic increases in their assessed valuations.

James Gerry, director of the municipal and property division at NHDRA, explained in a 2021 statement what an increase in assessed value means for property owners.

“In short, just because a homeowner’s assessed value goes up does not mean the amount of property taxes they pay will also go up,” said Gerry. “Assessed value (AV) determines who will be paying the property taxes. While an individual’s AV is important, the driving force behind how much any property taxpayer will pay is the relationship between their AV and every other property owner’s AV in the city or town in which they reside.”

For example, if a taxpayer’s AV in a town increases by 10 percent, but the town’s overall AV increases by 15 percent, given that everything else is equal, the taxpayer should see a decline in their property tax bill.

“One way to think about a town’s total AV is to think of it as a pie,” Gerry stated. “Your AV is just one slice of that pie. If your slice goes up by 10 percent, but the overall pie grows by 15 percent, your share of the overall pie will decrease.”

Assessed value is not the only factor to influence property taxes. One of the main drivers of property taxes is appropriations, which are the amount of money a town is approved to spend each year due to its budgeting process. Another factor is the amount of non-property-tax revenue the municipality collects. Increases in non-property-tax revenue, such as grants, fees and other taxes, could help lower property taxes. A decrease in these revenues could have the opposite effect.

Property values throughout the Monadnock region have nearly doubled, according to Zillow’s home value index, which measures median home prices in an area. In February 2015, the median cost of a home in Peterborough was $206,000, and in October of 2022 it was $402,000. In Hancock, prices rose from $228,000 to $458,000 over the same period, and in other towns in the region that trend is generally the same. 


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