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Old 07-13-2017, 04:51 AM
 
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Is there any correlation between size / number of tax increases and number of people in the town? I would think with a larger number of people unexpected new expenses would be spread over a larger base and result in a small tax increase.
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Old 07-13-2017, 06:34 AM
 
Location: Currently in CT but have recently started construction for our retirement home in NH
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Originally Posted by jdhpa View Post
I would think with a larger number of people unexpected new expenses would be spread over a larger base and result in a small tax increase.


I would think a larger number of people would require more town services (town admin, police/fire, larger transfer station) and may also require a larger school system, which all would result in more taxes to run the town.
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Old 07-13-2017, 09:14 AM
 
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Originally Posted by Brave Stranger View Post
Look into the Lakes region. Many of the lake towns have stable property taxes due to the heavy taxation of waterfront homes.
This is my advice, too, although we didn't heed it ourselves when we recently moved from one high-tax town to another.

There are a lot of towns around Lake Winnipesaukee and Lake Sunapee which have tax rates below $15 or so. Some are much lower than that. Sub-$15 is considered very low in NH. These are towns with a large number of expensive homes, many of which are second homes, and the towns are also often filled with retirees. This results in a large tax base but fewer people needing services, especially schools.

What I found so interesting when looking at real estate in a lot of towns around the lakes was that despite the large number of very expensive properties and desirability of these towns during the summer, "regular" houses were quite affordable. Year-round residents in relatively modest houses really benefit from the high valuations of the lake-front properties. When I did the math, I saw that in most cases we would either come out ahead or break even, when compared with buying a somewhat less expensive house in a higher-tax town. And, your mortgage (if you have one) eventually ends. Taxes are forever. (Yes some towns do have elderly exemptions which reduce the taxes of the elderly, but from what I've seen the amounts vary dramatically depending on the town, and I believe all are means-tested.) The only possible problem for someone still working is that the towns can seem somewhat remote.

To respond to another poster, I don't think it's so much the number of people in town which affect the ability to absorb a large expense, as much as the size of the tax base. I think the ideal (at least for "regular" residents with modestly assessed homes) is big tax base/small population (as in many Lakes Region towns.) The Lakes Region towns are quite unusual in being able to have a large tax base while not having a large population. Because of that situation in those towns, their rates do seem to be quite stable. I have also noticed some affluent towns opt to pay for projects with one big tax bump for a year or two, rather than paying by bond. So there might be a jump but then it will go back down.
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Old 07-13-2017, 10:10 AM
 
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Originally Posted by sailor_lou View Post
I would think a larger number of people would require more town services (town admin, police/fire, larger transfer station) and may also require a larger school system, which all would result in more taxes to run the town.
But on a per capita basis it is most likely less expensive. One new police officer is needed for 1 person or 1,000 people - it's cheaper per person when they can spread the cost around 1,000 people.
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Old 07-13-2017, 11:59 AM
 
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Originally Posted by robr2 View Post
But on a per capita basis it is most likely less expensive. One new police officer is needed for 1 person or 1,000 people - it's cheaper per person when they can spread the cost around 1,000 people.
Yes, something like this is what I had in mind. The cost to build a school is probably similar in towns with large or small populations, so when one is built in a small town it would create a bigger spike in taxes to pay for it. On average over decades it may even out, but it seems there would be bigger spikes in a low population town. I understand it's the tax base that matters, but for many towns the tax base is probably proportional to the population (though there are exceptions).

Last edited by jdhpa; 07-13-2017 at 12:47 PM..
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Old 07-13-2017, 04:44 PM
 
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Originally Posted by jdhpa View Post
I understand it's the tax base that matters, but for many towns the tax base is probably proportional to the population (though there are exceptions).
I wrote a whole long post but it was sort of convoluted, so I deleted it. In short, yes, in general, you are probably correct, and this post is not to refute that statement, just to provide more info. for the OP to consider. If you were to divide towns/cities into population categories, I am quite certain that the average valuation for each category would progress from lowest for the smallest towns, to highest in the largest towns. Whether that translates into a more stable tax rate for larger towns is really up for debate, because so many things affect the tax rates, especially when your tax base is large because you have a lot of people. (As an aside, it seems that large towns tend to have more "wants" with many more people willing to spend, and different forms of town governance/town voting, which is also something to consider.)

What I find interesting is to compare valuations of towns that are roughly the same size, especially since so many towns are small and someone may well be deciding among several towns of roughly the same size. Valuations are listed on the spreadsheet of property tax info. on the NH Dept. of Revenue website. The Lakes Region towns are special cases, I agree. For example, Wolfeboro and Peterborough, which is a nice and relatively affluent town in the Monadnock region, are about the same size. Prices for "regular" houses appear to be roughly the same. Yet, Peterborough's valuation is only about 31% that of Wolfeboro's. Wolfeboro's tax rate is $14.63, and Peterborough's is $30.84. And that's with Peterborough also being a retirement destination, and I would guess having a larger commercial tax base.

More striking (and this is just an interesting example, not same size towns), Wolfeboro is less than 27% the size of Keene... Keene being one of the bigger "cities" of NH (bigger than Portsmouth, which people often forget), and yet its valuation is over $2 million higher than that of Keene. Wolfeboro's tax rate is $14.63, and Keene's is $36.39. Now, in this particular example, Wolfeboro's relatively modestly priced "regular" houses are still quite a bit more expensive than those of Keene, because Keene's real estate market is not strong, but even so, one is likely to come out ahead in Wolfeboro.

There are many examples, though, where you can compare two towns of about the same population, with similar real estate prices, with neither town having the benefit of a large portion of their valuation coming from a relatively small number of very expensive properties, but one town will still have a significantly (if not dramatically so) higher valuation. Things like size of commercial tax base make a difference, as do number of apartments, especially in small towns which have a lot of low-value multi-family units. In those cases, a school project may well cost almost exactly the same in either town, but one town will be better able to absorb it.

Last edited by cowbell76; 07-13-2017 at 05:02 PM..
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Old 07-14-2017, 09:03 AM
 
Location: West Madison^WMHT
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Post The ominous "Equalization Bureau" and New Hampshire's "equalization ratio"

If you can, look for a relatively small (or at least low-value) house on a big current use lot, in a town with a bunch of "summer people" high-$$$ lake houses which sit empty most of the year and don't bring kids into the school system.

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Originally Posted by GraniteStater View Post
Those are high valuation property rich towns with lower property tax rates. Moultonboro is a good example of this.
Some towns do weird things with their valuation across the board to keep the "tax rate" low while still collecting plenty of property tax money. This is part of the driver behind the "equalization ratio" in New Hampshire. There's a ton of reports over at the Equalization Bureau.
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Old 07-14-2017, 10:55 AM
 
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Originally Posted by Nonesuch View Post
Some towns do weird things with their valuation across the board to keep the "tax rate" low while still collecting plenty of property tax money. This is part of the driver behind the "equalization ratio" in New Hampshire. There's a ton of reports over at the Equalization Bureau.
Great point. There are so many things to consider!

Each town employs or contracts with its own assessor, and the valuation is independent of other towns. Some towns are frequently assessed at less than 100% of market value, while others are assessed well above 100%, so the "total" tax rate (which is what I gave in my examples in previous posts) doesn't tell the whole story. Think about it - if two houses in two different towns are each assessed for $200,000, but one is really worth $150,000, and one is really worth $250,000, on paper, one homeowner is basically paying taxes on value which isn't there, and one is not paying taxes on value which is there. If both towns have a total tax rate of $30, and so both houses have a tax bill of $6000, things look equal, but they're not. One town calling the rate $30 is really artificially maintaining a lower rate - if you calculated the rate based on the real value of $150,000, your rate would be much higher ($40.) The other town would effectively be paying $24 for $1000 of real value. A huge difference. I have mentioned I have owned homes in two high tax towns, but one town was almost always well above 100% and the other is usually below 100%, so in the end the tax situation is better in one town than the other (nevermind what one gets for those tax dollars.)

NH annually calculates the equalization ratio Nonesuch mentioned, and they also publish the full value tax rate which takes this ratio into consideration.

Just to add - that was just an example to make the math easy. Usually if you see two tax rates that are the same, the full value tax rates won't differ by as much as they did in my example, but it can happen, although I believe NH requires the equalization ratio to fall between 90% and 110% at least once every 5 years. (In my observation this actually means once within one 5 year period, and then once within the next 5 year period, so it could 9 years apart. I doesn't appear to be the case that if it's in range in 2015, it needs to be in range again by 2020.)

Last edited by cowbell76; 07-14-2017 at 11:04 AM..
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