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I live in northwestern VT and would love to retire next year. I am looking for a good source of current, reliable tax information on NH (income and property) because frankly, I am concerned that the tax burden here in VT will impact our quality of life in retirement (we don't live extravagantly by any means). Every single dime of income is taxed here, and as you know, the education tax is pretty much out of control. Hubby and I have visited the area in and around Littleton numerous times over the course of the 15 years we've been here and very much like that region.
I live in northwestern VT and would love to retire next year. I am looking for a good source of current, reliable tax information on NH (income and property) because frankly, I am concerned that the tax burden here in VT will impact our quality of life in retirement (we don't live extravagantly by any means). Every single dime of income is taxed here, and as you know, the education tax is pretty much out of control. Hubby and I have visited the area in and around Littleton numerous times over the course of the 15 years we've been here and very much like that region.
Littleton is a good town with low electric rates from what I hear. We live not far from there and use it as our shopping hub for the most part.
You can Google "NH property tax by town" it will give the total tax by town. Moultonborough is usually the lowest around $9 per $1000.
NH taxes dividends and interest, but I believe they do not tax pension income, perhaps someone with an accounting background will know more about this.
As a retiree, I do not find NH to be very tax friendly. Once you're retired, you don't pay tax on earned income anywhere, so the absence of an income tax is not advantageous. Likewise, you're probably not spending as much on "stuff" as you did when you had a family and/or a larger home, so the absence of a sales tax isn't as beneficial either.
However, you will get to pay a state tax on D&I from your retirement savings, and a hefty property tax in a lot of towns.
If you want to move here, take a look at your savings and figure out how much the D&I tax is going to cost you, and look closely at the property tax rates in the towns you're considering.
Rates for 2018 aren't published on the state website yet, but you can get them from individual towns. And the state websites have a lot of other good information, like how/where to register your car, etc.
As a retiree in VT, I paid $120 to the state last year for income tax. The previous 3 years I paid nothing. If your taxable income is lower that about $100,000 you will not pay the full property tax (there is a form you have to fill out each year to get the "discount"). I shop in NH so no sales tax. I don't find the tax burden very high in VT. This coming year I may have to pay more income tax because I had to start taking withdrawals from my IRA which is taxable income.
NH does not reduce property tax for anyone. And they charge outrageous amounts for your car each year.
You really have to add up the numbers for yourself. A lot depends on your income level.
^ Some towns in NH do actually reduce property taxes for some residents, but as far as I can tell, the schemes have to be adopted by the towns. (Someone please correct me if I am wrong - it's possible every town offers these exemptions to some degree, but they are definitely not all created equal.)
I know of two towns which reduce the assessed value of homes owned by elderly homeowners by up to $100,000, but it is age- and means-tested (only the oldest, poorest residents receive the full reduction.) There are also small credits for veterans and, I think, the disabled, and the blind.
I get the impression these are little-known things because they are never mentioned on here.
Edit: Actually, I stand corrected. *My* lovely town actually exempts the first $160,000 of assessed value for the oldest, poorest homeowners. (And we are not a town with well-above-average property values, though we are probably a town with well-above-average-incomes for our elderly residents.)
It's actually surprisingly generous - age 65-74, $80,000 exemption, 75-79, $120,000, and 80+, $160,000. Income for an individual not to exceed $28K, and for a married couple, not to exceed $45K. Assets excluding real estate not to exceed $100K.
It looks like they actually don't have a sliding income scale, from what I can tell... I thought I saw that once in another town.
Last edited by cowbell76; 10-14-2018 at 03:29 PM..
A little more research shows that every town in NH is required to offer an elderly exemption, but it is up to the towns to determine the amount of the exemption and the income and asset limits, above very low minimums required by the state. The state apparently only requires assessed values to be reduced by $5,000 for the lowest-income/lowest-asset elderly homeowners.
Thank you ALL so much for this valuable information. I will check out the links and try to come up with some comparative numbers. I think it may not always be worth it to uproot an established life and home to save a couple/few thousand dollars. I will surf around. I may even have to put off retirement for another year or two while I figure it out.
VT offers NO relief other that the reduction in property tax based on income, and I believe that is just for the town portion of the tax, NOT the education portion. But it has also been discussed that this 'subsidy' may not always be available.
How does NH fund education (I can probably find this on the web.....) but here, there doesn't seem to be much traction in getting a change in our system. Conservative thinking legislators in Montpelier are outnumbers by the democrat/progressives.
Thank you ALL so much for this valuable information. I will check out the links and try to come up with some comparative numbers. I think it may not always be worth it to uproot an established life and home to save a couple/few thousand dollars. I will surf around. I may even have to put off retirement for another year or two while I figure it out.
VT offers NO relief other that the reduction in property tax based on income, and I believe that is just for the town portion of the tax, NOT the education portion. But it has also been discussed that this 'subsidy' may not always be available.
How does NH fund education (I can probably find this on the web.....) but here, there doesn't seem to be much traction in getting a change in our system. Conservative thinking legislators in Montpelier are outnumbers by the democrat/progressives.
Thank you again to all of you~
NH funds education by town property taxes & a small state-wide property tax.
OP, I don't think you'll like the way education is funded in NH. I think it is probably worse than in VT. As mentioned above, it is funded solely through property taxes, with pretty much each town or district for itself. Most people, from both sides of the aisle, think it is unsustainable and unconstitutional (state constitution) and puts a huge burden on property owners in some more property-poor towns in particular. (Google, there is tons written about it.)
We should clarify that the property tax has 4 parts - state and local education (state being a tiny amount, local typically being more than half of the entire tax rate), town tax, and county tax (another small portion.) Typically the tax rate is cited as one number.
As far as I can tell, there is no exemption for any one specific part of the overall property tax. If you are eligible for an elderly exemption, for example, you don't pay any tax on the portion of your assessed value which is exempt. Likewise, if you were to receive, say, a veteran's credit ($500, typically) you would just have the taken off your total tax bill. The burden is just spread to all the other taxpayers in town.
I do not think many towns are anywhere near as generous with their elderly exemption as my town is.
Also, I forgot, and I think this is statewide - for the elderly exemption, you have to have been an NH resident for 3 consecutive years.
Last edited by cowbell76; 10-14-2018 at 05:21 PM..
OP, if you look at the table I linked to, it does show town property tax rates broken down by education, town, county, etc. You'll notice that the total property tax usually reflects the education tax, which is the main reason for the variation across towns. Before you buy anything, try to ascertain any pending plans for the school system. My town recently repaired and put an addition on one of the schools, and our tax bills went up ~45% in three years. You don't want to be surprised by something like that right after you move here.
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