How about those property taxes?

[Flylady]

I am courious, with the current real estate market slowdown and the lack of liquity for generating new mortgages, does anyone here believe that they may see some property values declining? If someone buys lake property today and it sold for less than the assessed value from a year ago, would the buyer expect the assessment to beloweredtot the sale amount? What if your propery value goes down? Can you request it to be reassessed? Has anyone had a similar experience?

[jeffk]

Moultonborough just did an reassessment and my value dropped by 5% since the valuation done 3 years ago.

You could make an argument that the value paid for a house purchased should be the new assessed value however valuations are done by plugging information into a complex formulation provided by the companies that do these evaluations. Since everyone is plugged into the same formulas it makes it "fair". Valuations don't necessarily match sales prices although they should be in the ballpark. Recent sales prices are included in the formulas. I'm not sure how towns handle sales and property value. Maybe the low price you paid was because the seller was desperate? When the next reevaluation was done you would get plugged into the formulas no matter what price you paid.
Why shouldn't you when you buy?

I'm not sure what luck you would have challenging a single assessment if the town is not doing a general reevaluation and without a recent sale. If everyone is being valued by the same formulas, even if those formulas are not completely up to date, they would consider that everyone is getting the same, and therefore "fair", treatment. The state pushes for frequent revaluations to deal with property value changes.

[Irish mist]

Llforrelaxin.........I thought your idea of a 1% sales tax to shift the cost of taxes to people from away was advocating for a new tax ? I just tried to point out to you that this has been tried, along with an income tax in many states.....and not once has it helped control the cost of property taxes. It really is all about limiting government spending. There is no other choice.
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Opium Rehab Forums

[Lakegeezer]

If the government can't control spending, where does the money come from. Property taxes can't fund an out-of-control situation.

The school funding issue in NH is not settled. There are still towns that need more welfare funds to properly operate their schools. What I don't understand is, why doesn't the welfare come with less local control. Franklin and Claremont are the two poster children for towns that lost their industry and can't seem to make ends meet. While I understand that they need help getting back on their feet - and educating their kids is part of that - why shouldn't the people of NH, who are funding the towns, have some say in how they run their local government - for example, attracting new industry? Additional taxes are a threat to the NH way of life, and throwing money at towns with no initiative to recover their economy seems to only increase the threat.

[Rattlesnake Guy]

Not wanting to touch off a powder keg but in this capitalist society and economy where things manage to work out due to the economics. People move, towns flourish, towns die. Businesses prosper and stay or move. People do the same. If a town does not "work" then perhaps it should be allowed die a natural death rather than drain money from the successful towns that are making the hard choices and making it work. If you don't like the schools in your town as much as my town then do what your neighbors are doing and move to a town of your choice. If you move to my town my taxes may go up to help educate your child. Yours may go up to educate mine. But don't ask me to pay more taxes to fund your school. It is our collective responsibility to position ourselves on a boat that is not sinking and grab an oar.

[Weirs guy]

I'm a product of the Franklin School system graduating in 1992. It amazes me that the whole school funding issue still exists as it did then.

I believe that each and every child in the USofA deserves the exact same public education (why is it if I move my kids from town "A" to town "B" they are both not on the same page?), and that school funding, IMHO, should be nationally funded, not locally.

[Weekend Pundit]

Originally Posted by Weirs guy

I believe that each and every child in the USofA deserves the exact same public education (why is it if I move my kids from town "A" to town "B" they are both not on the same page?), and that school funding, IMHO, should be nationally funded, not locally.

I think I know what you meant to say, but it didn't really come out that way.

If every child were to have the exact same public education as every other child, then our school systems would be catering to the lowest common denominator. There would have to be either state or national control of all of the schools. That's a formula for disaster because all that statewide control of schools has ever brought is statewide mediocrity in education.

I doubt the school systems (or more specifically, the teachers unions) will ever say they have enough money. No matter how much they have it will never be enough. But as we have seen again and again, it isn't how much money a school system has so much as it's how they spend it.

I've seen plenty of school systems in a number of states with very high per student spending that have very poor performance. That shows that they're spending it unwisely. It's no different here in New Hampshire.

[Deepwaters]

This has been an interesting thread, and I have been following it from the start. However, I actually got a log-in so that I could express how stunned I am that Jeff's straight-forward logic and very simple examples have actually silenced the emotional knee-jerk responses that were populating this topic. - Well Done!!

[Skip]

Originally Posted by Deepwaters

This has been an interesting thread...Jeff's straight-forward logic and very simple examples have actually silenced the emotional knee-jerk responses that were populating this topic. - Well Done!!

I agree wholeheartedly!

And just to once again show that no matter how many or how high your taxes are - it is never enough to satisfy the government...this timely article from the Herald referencing the financial plight of our good friends and neighbors just south of the Granite State border:

How much & which new tax do we need?

[Rose]

My husband and I were watching an episode of Chronicle (Boston edition) about the bridge situation in Mass (and it's similar elsewhere in the country). The secretary of transportation sited the rule of five...if you don't pay to maintain a bridge now, you'll pay five times as much to do it later. It's always driven me totally insane that keeping up the maintenance on a building, bridge, roadway, etc. never seems to added into the cost equation when it's being built, and maintenance seems to be one of the first things cut in the budget when there's a crunch.

[vrrooom]

There have been numerous research projects which have studied the relationship between spending per pupil and student performance. They all agree, spending more does not result in highter levels of student performance. Parental involvement is the best driver of student preformance acording to these studies. Look at Gilford, one of the highest levels of per pupil spending in the state and only average student performance. Leadership with dollars not, apparently follow the money leads to the administrators not to the students.

[Ropetow]

Originally Posted by vrrooom

There have been numerous research projects which have studied the relationship between spending per pupil and student performance. They all agree, spending more does not result in highter levels of student performance. Parental involvement is the best driver of student preformance acording to these studies. Look at Gilford, one of the highest levels of per pupil spending in the state and only average student performance. Leadership with dollars not, apparently follow the money leads to the administrators not to the students.

Not to sound pompous, but I have my Ph.D. in education administration and am a college professor of teacher education, have done extensive consulting and research and.....you are right...there is no proven link between spending and student achievement. Like any function, government or private sector, the key is spending money wisely. If spending-per-pupil equated acaemic achievement, then Boston and Washington, DC would have the highest-achieving students on the nation. That being said, states have implemented curriculum frameworks so that each fifth-grade student in a state would have the same curriculum. This cannot be done on a nation-wide basis....because the Constitution places the responsibility for education at the state level.

[jeffk]

So if we DID want to address the property tax issues by changing the tax structure would it be possible to:

Define a level of adequate education (AE) that is reasonable and wouldn’t grossly expand the current educational funding levels (<15% increase??)
Are not children already getting an adequate education in the state? I'm not really sure why more would need to be spent.

Constitutionally (to keep it away from constant meddling)
1. Create a state income tax for the sole purpose of funding an AE.
2. LOCK the rate at (for example) 4%, an amount that would fund the states obligation.
3. State that this level of funding shall constitute coverage of an AE (so that cost can’t be inflated by mucking with the definition of AE in the future) (this clause also gets the courts out of the debate)
4. Require that any excess revenue beyond that required for AE must be refunded to the taxpayer.
5. Eliminate the state property tax
6. Require that local property taxes be reduced by the amount that would now be provided by the state.
7. Cap future local property tax increases to 4% unless overridden by local supermajority votes.
8. Besides providing the funding and the guidelines for an adequate education the control of education shall remain in the hands of the local educational authorities

Would this be possible?
Would this address concerns about out of control educational and general spending and local control?
Has any state ever done something like this?
Would we want a complete shift to an income tax or some type of mix? Perhaps keep the current state property tax ($2 - $3 per $1000) and fund any new spending with an income tax at say 3%? I don’t like a sales tax because it is impossible to refund excess revenue.

[Pineedles]

You are correct when you said " NH is a low-tax state to live in for most of her residents". I don't think I am using fiction though to get my point across. Perhaps it is a more emotional appeal, than a call to totally overhaul the tax structure in NH. I guess the thing that makes me the maddest is that there is no ability for those folks that are contributing the larger share of taxes to be represented (for those living out of state). We consume the least amount of services, yet have no say in how the money is spent. I like JeffK's latest post as an alternative. But for what it is worth, I don't think that this small forum is going to have any effect on what is legislated in Concord.

[tis]

Jeff. You must not make income in NH or you wouldn't want an income tax. Do you honestly think ANY gov. could keep a tax at a certain percent ? No, it would eventually go up, even if the law had to be changed to do it. And so would the property tax. As others have said here, adding a NEW tax, never,ever, in the long run reduces another. And you said "any excess" beyond that needed for the AE should be returned to the taxpayer. Do you honestly believe there would ever be any returned to the taxpayer?


Don't tax you, don't tax me, tax that man behind the tree.

[Weirs guy]

Property taxes are great for this reason:

Does everyone in the state work in the state (or work at all?): No.
Does everyone in the state shop in the state: No.
Does everyone in the state live in the state: Yep.

While I sympathize with both the out of staters "taxation without representation" and older residents not being able to pay their property taxes, its still those individuals choices to live where they live. No mater what tax we have it will be unfair to someone, but at the end of the day life's not fair.

[Rag Top Daze]

Just out of curiosity, does anyone know of any state that allows non-residents to vote in town elections if they have a vacation home? Is NH so unusual in this area? Are we the only state where the vacation people complain about taxation without representation?

[Pineedles]

Originally Posted by Rag Top Daze

Just out of curiosity, does anyone know of any state that allows non-residents to vote in town elections if they have a vacation home? Is NH so unusual in this area? Are we the only state where the vacation people complain about taxation without representation?

Just a quick google search says the question of non-resident voting rights are being considered.

Delaware:

Nonresident property owners in Delaware’s resort towns are no longer eligible to vote by absentee ballot in municipal elections, although in the past they could cast absentee votes in Rehoboth Beach, Dewey Beach, Henlopen Acres, Bethany Beach and South Bethany. An election law, passed last year by the General Assembly, had no provision for nonresidents to vote by absentee ballot.
While no municipal elections have been affected by the law, elections are coming up this summer in the resort towns. Without amending last year’s revisions, nonresident property owners will not be eligible to vote, unless they go to the polls.

Rhode Island:

STATE HOUSE – Three State Senators from South County have announced their opposition to bills that have been approved, separately, by the Senate and the House of Representatives to ask voters in Westerly to allow owners of residential property in the community, even though they are not town or state residents, to vote on election referenda questions involving capital expenditures by the town.


I won't post other Countries, but they too are looking at voting rights. Afetr all the original rights to be able to vote included propert ownership.

[lakershaker]

Originally Posted by Rag Top Daze

Just out of curiosity, does anyone know of any state that allows non-residents to vote in town elections if they have a vacation home? Is NH so unusual in this area? Are we the only state where the vacation people complain about taxation without representation?

Connecticut allows non-resident land owners to vote budget related votes.

[B&D]

Today's federal funding = federal mandates, which = 21 school days of testing per year,....time spent the kids are not receiving an education. Want more of that for your kids?
Alton has decreed that they are operating on the basis of evaluating your property based on when it was at it's highest, vice it's advertised "Present Value"(which is today's value, not yesterday or tomorrow, which requires the tax folks to stay current on values), then added a surtax for water front property. Guess it's time to roll back the taxes on a state wide basis (like Prop 13), and force the local admin types to stay within a budget (like the rest of us). If you want your kids educated better then what is locally avaluable you have a couple of clear choices - move somewhere else, or work with the school.

[Weirs guy]

Originally Posted by Weekend Pundit

I've seen plenty of school systems in a number of states with very high per student spending that have very poor performance. That shows that they're spending it unwisely. It's no different here in New Hampshire.

See, they just need a better education!

I posted hastily and worded my thoughts terribly, and at the risk of not getting too much off topic, my point was when we move our children from one school district to another the curriculum should be the same. Something as important as education shouldn't be left up to local funding (I understand that the parents choice dictates whether the child goes to a "good" school or a "bad" school, but isn't that punishing the child who has no choice?). Could Franklin spend wiser (the city has a new ladder/fire truck that has a boom bigger then any building north of Manchester and a brand new police station with lots of neat new things to lock up the little delinquents who don't stay in school, cause their educations sub standard...)? Absolutely. Should the children of those not wise enough to know better be punished?

I agree with you, it all comes back to spending tax dollars WISELY.

[fatlazyless]

Neighboring state tax reciprocity, as exists between some states, does not exist between New Hampshire and Massachusetts since New Hampshire has no state income tax so this is a mute issue. If New Hampshire ever gives itself a state income tax, the reciprocity agreement would be an issue as the two states both want to do what best for themselves.

Massachusetts residents are already supporting the local NH mountain and waterfront towns with their property taxes on expensive vacation homes, and there's probably not too many Mass residents working in NH so for Massachusetts a reciprocity agreement would be a money loser. Why would Mass ever agree to that?

If the 'Old Man' can fall down and get smashed into pebbles, then ditto on long-time New Hampshire tax policy! Ax the view tax!

[Windrider]

Fatlazyless, it's also a moot issue.

[ApS]

Originally Posted by jeffk

Moultonborough just did an reassessment and my value dropped by 5% since the valuation done 3 years ago.

I would expect 5% fluctuations to occur.

What happens when your neighbor's cottage gets torn down, the lot split in two, and two McMansions get built in the place of one residence?

This apparently hasn't happened to you, but it's quietly happening elsewhere.

Unforeseen, it would throw a monkey wrench into your carefully considered lakeside retirement plans, and only then one might see the unfairness built into in this system. Friends have told me of McMansions being torn down to be replaced with $4M McMansions (in another state).

You've suggested that you would sell your Winnipesaukee home if your retirement plans didn't work out. Would you be as satisfied retired in Arizona?

I'm hearing that it's a "dry" heat.

[jeffk]

Originally Posted by Acres per Second

I would expect 5% fluctuations to occur.

What happens when your neighbor's cottage gets torn down, the lot split in two, and two McMansions get built in the place of one residence?

This apparently hasn't happened to you, but it's quietly happening elsewhere.

Unforeseen, it would throw a monkey wrench into your carefully considered lakeside retirement plans, and only then one might see the unfairness built into in this system. Friends have told me of McMansions being torn down to be replaced with $4M McMansions (in another state).

You've suggested that you would sell your Winnipesaukee home if your retirement plans didn't work out. Would you be as satisfied retired in Arizona?

I'm hearing that it's a "dry" heat.

So my 2 neighbors rebuild their $1 million houses into McMansions worth, for example, $2.5 million. My property value, by virtue of being in such illustrious company, goes to $1.75 million. My wealth just increased by 3/4 of a million dollars off the sweat of my neighbor’s brow. That’s so unfair!

Now my property tax has also gone up so I face some choices.

If, as you propose, I’ve had my head in the lake for the last 30 years or more, then I would be totally unprepared for such an occurrence and would need to cash in my $1.75 million house and move off the lake and spend the rest of my life bereaving my loss. BTW, for anyone that doesn’t realize lake property escalates in value and that means your property taxes are going to go up; It will be winter soon. It’s going to get very cold. Buy yourself a warm coat, gloves, and a hat.

Maybe I’m not quite as obtuse as you think and the property tax increase is painful but manageable, if I watch my spending. However I really like to travel and eat at fine restaurants. If I keep the house and pay the additional property tax I’ll need to give some of that up. Huummmm????? OK, I’ve decided to sell and get my $1.75 million and salve my pain by vacationing in Italy, Canada, France, Lake Tahoe, Martha’s Vineyard, and other wonderful places. And OH, the food. Yummmm. I visit the lake from time to time, usually I rent for a month every summer, and sometimes have a sense of loss. But did I mention the food? And the Virgin Islands??

Maybe I decide, regrettably, to sell my non lake home, which I have always planned I might have to (see, I’m getting smarter all the time). This provides ample money to cover my property taxes for the foreseeable future and now I can upgrade the lake house a bit too. I really regret having to sell my other house. No wait; I wanted the lake house so I guess I’m happy. This is getting sooo confusing.

Or, maybe I didn’t plan my retirement on a razor’s edge and I can absorb the tax increase without significant pain. I get to have it all. I’m deliriously happy. Isn’t that how life is supposed to be? I have it right here, it’s a little golden form. One GUARANTEE to a 100% SATISFIED life, no planning or contribution required. No bumps in the road or chop on the lake. Just sit back and enjoy. What?? No one else got one of these guarantees?? THAT’S why I’m so confused.

By the way, you imply that I’m a hypocrite by stating that when it happens to me ONLY THEN will I realize the unfairness of the property tax system and change my views. I am not that shallow.

In life, stuff happens; some of it not very pleasant. Stuff is then called something else. Some of it has happened to me, as I am sure to most people. I didn’t ask for special treatment when it did because I had planned for up and downs. I picked myself, dusted myself off and got on with it.

I point out a very significant fact. Almost everyone that struggles with high property taxes does so because they have a valuable property. They are not destitute. They have a favorable financial situation. No one has a guarantee to a house, let alone a valuable lake property. Neither do they have a guarantee to a car, or nice clothes. Gas prices have doubled in the past 13 years. Shouldn't someone be buying us gas?

I’ve been to Arizona, very flat for the most part, kind of boring. My wife doesn’t like hot climates so I guess we won’t go there, thanks. But there are LOTS of New Hampshire towns that are nice to live in. If I sold the lake house I’d be able to afford a VERY nice place almost anywhere else. Guess I’ll stay here. Unless things change. Somehow they usually do.

[GWC...]

Originally Posted by jeffk

Gas prices have doubled in the past 13 years. Shouldn't someone be buying us gas?

I wish...

[Pineedles]

jeffk,

Stuff happens and you seem to have a plan for any eventuality. I read through your post twice, just to be sure I understood your mindset. Problem is, that not everybody is willing to lose the lake house they have inherited and move, as well as some can't sell because of multiple owners. You sound like YOUR future is set. I wish mine and others were so concrete.

[Eki]

I have been trying to read this and stay quiet... but that is not possible...

I mentioned it in previous threads, and I'll say it again...

Those reports on NH tax burden are so [full of it].

We got fed up with NH taxes. we were payng $15000/year.
We moved to Scottsdale, AZ, have been here for a year, and our RE tax bill is $400/year for like valued property. Yes, thats $400 with 2 zero's.

I worked in MASS, actually still do, and so I paid an extra $180/yr in income tax to AZ... big whoop.

what's left?

sales tax ... wow, I would have to go on quite the spending spree, to make up $14000 in sales tax

The point I am trying to make is; if you own property of any significant value in NH ... you are taking it up the poop shute paying the NH taxes.

if you have a 6 digit income ... kewl for you... pay those taxes. But when you retire, I hope the market was good to you, because if your income falls from 6 digites to 4 digits - there goes your savings, right into the hands of the 30 or 40 people who actually show up to vote on how to spend it.

[Dickie B from HB]

Hooray for you Eki-

You made the point that I was making in my earlier posts. Property owners in NH are getting reamed.

If Jeff and all the others are so happy about paying exhorbitant RE taxes, then I say that they are welcome to them. But we both know that there are better solutions.

DB

[jeffk]

Originally Posted by Dickie B from HB

If Jeff and all the others are so happy about paying exhorbitant RE taxes, then I say that they are welcome to them. But we both know that there are better solutions.

DB

I wasn't going to respond to Eki because the information doesn't make sense and I didn't want to get into a messy debate. I want to make VERY CLEAR that I am not doubting EKi's tax bill. Instead I am pointing out that it is not in sync with publicly available information. Either the property is under assessed or we are comparing Arizona oranges to New Hampshire apples.

Here is a pointer to the Scottsdale, Arizona web site RE property taxes. http://www.scottsdaleaz.gov/taxes/realproptax.asp

Here is the pertinent info:
Residential: A home with an Assessor’s full cash value of $100,000 is multiplied by the assessment ratio to determine the assessed value. The residential assessment ratio is 10%, so the assessed value would be $10,000. Applying the current rate of $8.4766 per $100 of assessed value, the approximate tax would be $847.66 based on $8.4766 x ($10,000 / $100).

In summary, Scottsdale says it gets about $850 tax on a $100,000 house.

If Eki is only paying $400 then the property value must be less than $50,000 if a fair assessment was done. A property worth $50,000 would be taxed in the ball park of $340 in Moultonborough (2006 rate $6.71 per $1000). In Laconia the tax would be about $780 ($15.51 per $1000). This is hardly an exorbitant difference, and my town is actually a better deal. The NH median tax rate for 2006 is about $17.41 per $1000 for a tax of $870. The highest tax in NH would be $1950 in Newport which has a $38.93 per $1000 tax rate (OUCH). I wouldn't want to live in Newport.

In addition, Arizona's sales tax is about 8% and income tax goes from about 2.6% to 4.6% depending on what bracket you're in. I don't know about Arizona's dividend taxes, capital gains tax, and estate taxes, none of which apply in New Hampshire.

As to working in Massachusetts and paying their state income tax, I do as well. Mass doesn't allow an offset for NH property taxes even they are now collected at the state level. Why not? They have a good deal and don't want to give it up. They would probably be very unhappy to lose the income from all the NH residents if we did institute a state income tax. However, these are Mass taxes, not NH taxes. By working in Mass you get the worst of both worlds. However, I would venture to guess that most NH people do not work out of state and do not pay state income tax.

So, overall it seems that the more money you earn and the more you purchase the less benefit you get from Arizona's "better" property tax.

[Irish mist]

Good job jeffk exposing such nonesense. I too did no want to waste any time on such fiction......but the internet is a wonderful thing, and with the right tools it's easy these days to track down the "real" stats, and state your case.
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Yamaha xv920

[Pineedles]

Point is though, that there are good people that are losing their land. You may be rich and can accomodate the issue of increased taxes, but others feel helpless and want us to know that simple people are being forced off their land!

[Irish mist]

We all understand Pineedles that there are isues......but using "fiction" to get your point across is not the proper way to win people over to your side. There are vested interests that want and income tax, sales tax, or both, and they will use any means to push that agenda. NH is a low-tax state to live in for most of her residents.....that's a fact.

One answer to the property tax issue is for NH state government to set up more exemptions for the elderly like they do in Texas & Florida, and perhaps some kind of homested act for residents. What we should not do is change the whole tax strcture of the state.

This thread has been a case study in why I'm comfortable still using the property tax as the main source of income in NH. At least we can hold our local elected officals to account if we want to change things. Once Concord gets an income or sales tax we will never be able to control spending.
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RELIANT

[GWC...]

Originally Posted by Pineedles

Point is though, that there are good people that are losing their land. You may be rich and can accomodate the issue of increased taxes, but others feel helpless and want us to know that simple people are being forced off their land!

Point is:

Depends on what the definition of is, is...

You're a nice person; but if you spend the day in a bathing suit on Weirs Beach in January and the air temp is 20 below zero F, do not expect me to feel sorry for you should you experience frostbite.

Dress appropriately for the season's climate.

Property owners need to do likewise, financial climate-wise.

Plan your financial future or endure the consequences.

Is/was your pay the same as your parent's or grand parent's?

Did you pay the same as they did when you purchased a home?

Times change and expenses increase. Welcome to a capitalistic country.

People always seem to be happy when their income increases and unhappy when their expenses increase. Remember, your expenses are someone's income and your income is someone's expenses.

Life is choices and challenges...

[phoenix]

real comparison is what a home is worth and what the taxes are since each state and locality taxes at a different % of real value. We live in Phoenix and the taxes on a 400K home are about 2000-3000. In moultonboro taxes on a million house would be about 7000-8000 or so. In Laconia it might be twice that

[vrrooom]

One of the reasons we need to be villigant about taxes (state) in NH is that our system of state legislators who work little time and are hardly paid. Just imagine if there was a huge pool of money, from an income tax or sales tax avaialble in Concord. Lobbists would make appointments, dinners, schedule golf outings, journeys to Florida in the winter to see new design fire hydrants on the beach (I actually read of that one in the Plain Dealer) creating plenty to do, plenty to spend . Well if the legislatari are so busy spending the states (not yours anymore) money, they need to be compensated. Soon they become full time, spending more and more, and are well paid (see the outrageous raises recently handed to staff if you want to get an idea of the compensation level the legislatari are seeking.) Money at the state level is sometimes described as honey which draws bees to help spend it. I have other visions of this.