How about those property taxes?

[Irish mist]

Jeffk........you stated in a rational fashion why new, or extra tax streams never solve the "spending" problems of state, or federal governments for that matter. The problem is that the special interests in the towns & on this board have no interest in looking to grapple with out tax issues in an honest way.......it's all about how they can "game" the system for themselves.


AC2717..........NH is not in the business of serving the interests of non-residents. We are a state dependent on tourist dollars, and like many states we take advantage of that situation. Have you ever checked out the taxes on a hotel bill in NYC After all.......don't you shop sales TAX-FREE up here in NH ? How much money has that saved you over the years buying your TVs & computers and other things....thousands ? It works both ways.

[ITD]

Well said Jeffk.

[Dickie B from HB]

Jeff-

You make some good points. But keep in mind that the value of your property is meaningless if you have to live in it. For those on a fixed income property appreciation only means that perhaps they will have to sell when the taxes become unaffordable. Where do they move to? Will they move to some less desireable location where the costs are less? Is this the destiny of NH property owners? Your reasoning leads one to conclude that you are okay with this. Is this the legacy you want for NH?

DB

[SIKSUKR]

Bravo Jeff!Very well thought out and written.

[GWC...]

Originally Posted by Dickie B from HB

Jeff-

You make some good points. But keep in mind that the value of your property is meaningless if you have to live in it. For those on a fixed income property appreciation only means that perhaps they will have to sell when the taxes become unaffordable. Where do they move to? Will they move to some less desireable location where the costs are less? Is this the destiny of NH property owners? Your reasoning leads one to conclude that you are okay with this. Is this the legacy you want for NH?

DB

Life is choices and challenges...

Short memory?

Reread an important part of his input:

Originally Posted by jeffk

People in New Hampshire also decided (knew) that the tax burden would fall on property owners. Many years ago the people who owned valuable property were the “well to do”. They ended up paying the taxes. Everybody was happy. But now, through the growth of value in property, many “common” people are being burdened with real estate assets worth millions. They, whether they like it or not, have become wealthy. The long known policy in New Hampshire is that the property owners pay the taxes in proportion to the value of their property. Is this a surprise? How could it possibly be? Further, if the owners lived in New Hampshire they have had many years without state income or sales taxes. This is not an inconsequential advantage. Also, given a million dollar property appreciating at 3% a year ($30,000) it about equals the property taxes in Laconia. Maybe the kids could help on the taxes for what will be their million dollars plus inheritance. Maybe a reverse mortgage would help?

I live in New Hampshire and own both a primary home and a house at the lake and pay as much in property taxes as I would if there were a 6% state income tax. I picked out our Lake property in Moultonborough specifically because the taxes there were low. Even so, my property taxes have more than doubled in the 13 years we have owned it. Its value has quadrupled. I think it’s a fair deal. I love the Lake and plan on retiring there eventually. However, if I needed to, I could sell the lake house and pocket the money to fund retirement. I don’t think I’ll need to because I’ve planned for tax and cost of living increases. However, you can never tell.

Do I have a guarantee that I get to live at the Lake? If I don’t or can’t pay my tax bill someone else will have to. Is it fair that I can skip out on my bill and they have to pick up my share because I have a house I don’t want to give up?

[Irish mist]

Thanks for proving GWC that people will read ONLY what they want to see......even if it is right there in front of their eyes. My contention is simple: until someone, anyone, can show me one state in the nation that has cut property taxes in the long run by adding an income or sales tax we are just running around in circles here.
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Fz1

[jeffk]

Originally Posted by Dickie B from HB

Jeff-

You make some good points. But keep in mind that the value of your property is meaningless if you have to live in it. For those on a fixed income property appreciation only means that perhaps they will have to sell when the taxes become unaffordable. Where do they move to? Will they move to some less desireable location where the costs are less? Is this the destiny of NH property owners? Your reasoning leads one to conclude that you are okay with this. Is this the legacy you want for NH?

DB

The problem with supporting someone, and property tax relief IS government support, is that you are forced into some evaluation of their need and whether they “deserve” the support. You supply an example of someone on fixed income. OK, why are they on a fixed income and how much is it?

Example one:
Useless 65 year old son inherits parent’s lake house. It’s been in the family for generations. Son has no money for taxes or maintenance. Does he deserve to keep the house?

Example two:
Two people with extremely similar lives, both have lake property. One difference, Person A saves $5000 a year for retirement, Person B goes on $5000 vacation every year. After 40 years of working, at retirement, A has a million bucks in the bank and can afford property tax for his appreciated lake house. B has nothing(except his million dollar lake house). Should we help B? Why?

Example three:
Again two people, both on moderate incomes, both save a bit. A lives in a lake house, B doesn’t. A’s property appreciates and taxes go up, B’s much less so. At retirement, A has a house worth $1,000,000 and can not afford the property tax. B’s house is worth $300,000 and he can afford the taxes. Should A get tax breaks? How about B?

Example four:
Two retired seniors living in $1,000,000 lake houses with property taxes of $15,000. One has income sources of $100,000 a year, the other $30,000. Should the one with $30K income be given a tax break? Why? How about the other senior?

Where will people move to? Let’s see, sell a million dollar house on the lake and buy a very nice $300K retirement home near the lake (probably a nicer house than their lake house). Put boat into marina. Bank $700K for retirement. Sorry, not what they obviously want but hardly a desperate existence. As I noted family help and reverse mortgages are also an option. How about a condo on the lake? How about moving to a lake where land is less pricey? Many people retire and move across the country to less expensive, smaller, and easier to maintain property. They also look for a warmer climate. The negatives are that they move away from community, friends, and family. I don’t know how many people are “forced” into choices by reality and how many happily make such changes. Should government get involved with tax relief for all these people? Many (most?) towns already have various tax adjustments for seniors, veterans, and other purposes. I think that is appropriate and reasonable although I know many seniors who are well of and really don’t need the relief. Wouldn’t the money be better deserved by a young family just starting in their first home who are struggling with monthly bills?

The New Hampshire “rules” for taxes are well established and overall have been and continue to be a low burden for the state’s citizens. Again, what are the surprises? That property taxes are the primary source of revenue in the state? That valuable land appreciates in value? That property taxes go up with the value of the property? What I want people to do is to understand their choices and take RESPONSIBILITY for them. I don’t want government evaluating who deserves breaks and who doesn’t because it’s an impossible and inherently unfair process. The complexity of human lives is impossible to be analyzed. When government decides that someone “deserves” tax relief they automatically decide that everyone else does not deserve the relief and ALSO will pay more to subsidize the “deserving one”. I will take responsibility for my life and you take responsibility for yours. Government should take responsibility for making sure that we don’t do bad things to each other via laws. Then BUTT OUT.

[ITD]

JeffK another excellent post, keep em coming.

[LIforrelaxin]

Taxes Taxes Taxes..... It seems as someone is always starting a thread on this. There are multiple sides to the argument, and all sorts of twists that can be taken.....

Nope no matter what happens Property Taxes are not going back down... THat is just the way it is..... What the people of NH need to ask themselves is this.... Do we:

A)keep the tax scheme the way it is, and hope that property Taxes don't get so rediculus that people can't afford them..... and by the way I am not only talking about waterfront here..... waterfront home owners are just the first to feel the pinch.

B) Allow some new Taxes to get established to stop the increase in property taxes and possibly ship some of the burden to those from outta of state.... example here would be .... 1% sales Tax..... People would still flock to NH to shop and this would generate enourmous revenues....

It simple nothing is going to Fix the property tax nightmare.... the question is how to move forward. What has been done is done, and will remain. Do you people want to make it worse or look for Better solutions......

[Irish mist]

What "nightmare" are we talking about Lofforrelaxin ? NH ranks 49th out of 50 states in TOTAL tax burden ! We have no general income tax, no sales tax, no capital gains tax. We are a low tax state. Some people have issues with property taxes.....most don't. It's been stated over & over & over again that a sales tax and or an income tax once established in a state does NOT reduce property taxes.

Connectiuct & New Jersey are 2 states that had promised lower property taxes by putting in an income tax in recent history. Both of those states are tax-hells ! It's the government spending people. Always has been.....always will be.
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Triumph Tt600

[Merrymeeting]

Jeff,

As you will see in other annual posts on this topic, I've been firmly in the NH-property-taxes-are-unfair camp. Your well stated, clear posts are causing me to strongly reassess my position.

Well done.

[LIforrelaxin]

Originally Posted by Irish mist

It's been stated over & over & over again that a sales tax and or an income tax once established in a state does NOT reduce property taxes.

Irish Mist please re-read my post.... I am not advicating that a new tax will reduce property tax nor at this point am I concerned with my tax bill.... I never have and never will.... What I am stating is the obvious.....either the property taxes keep going up to support the government, which in some areas is getting to a point that it is causing some hardships.....because spending will not go down either.... or introduce a new tax scheme......

[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?

[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!

[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

[kjbathe]

Originally Posted by LIforrelaxin

1% sales Tax.....would generate enormous revenues....

Yes. Which would simply lead to more spending. It would do nothing to lower property taxes, and would do nothing to lower the overall tax burden.

More revenue! More revenue! That's the mantra. But we should all be asking, more revenue for what?