If You Think an Income Tax Will Reduce Your Property Tax, Read This (exemption, to live)

[abnfdc]

Originally Posted by jdhpa

Perhaps the next step is the place to start.

It always has been, but nobody wants to examine where to reduce costs/spending and actually go through with it.

Then you have the towns which actively fight against in bringing businesses in(read as good taxpayers). Those towns continue to raise taxes, provide little in the way of services, and continue to price the long time locals out.

[illtaketwoplease]

Those current use figures provided by the state are derived from yearly reports supplied by the towns. What you won't find is a list of current use properties, who owns them and where they are located. That information is buried in assessment files that is hard to access and some towns won't provide it without a fee -- if at all. The formula for assessing current use properties is a closely guarded secret of the current use board.

Assuming you're in a rural part of town (as I am), and the land is not posted and isn't clearly curtilage (e.g. somebody's mowed yard or horse paddock), you absolutely can "just go out" and it is not trespassing.

That's not to say that if you are doing more than just passing through that you shouldn't be polite and contact the landowner, but legally if the land isn't curtilage nor posted, you do not "have to ask the landowners permission to" hike across privately owned, unposted, property, even absent any sort of "easement" or formal agreement regarding access.

I understand the hunting regs and private property ownership - however the laws and regulations you cite do not jive with reality. The vast majority of land in current use in my town is posted - and I have specifically asked to use property in current use and been told a firm "no". My guess is that the property you refer to using is likely owned by someone who doesn't live nearby... doesn't know you are using it... or the parcel is large enough so that it doesn't bother them. The right to use others property without asking sounds good on paper - but owners hackles get up when you go to use it. I have even had a call from the police asking me what I was doing visiting a non-posted CU property and to get the owners permission for access. I have directly communicated with the CU Board and asked about suitable "recreational uses" and was told that I needed to get the landowners permission prior to use because an actual "suitable recreational use" can be restricted by the owner. So - no - you can't just use someones property if it falls into the category of "suitable recreational uses" -- and that only makes sense.

But that really is besides the point of the wholly unfair tax breaks given to current use property owners.

Every time you write "pay their fair share", I read that as "I want to stick it to my neighbors who own more land than me by taxing them based on the highest and best use of their property rather than what they are actually using it for"

For example, the town put in a new gravel road a while back and now I have a few acres with road frontage on the other side of my property which could be developed into a housing lot and sold for a couple hundred grand. If I were to take those acres out of current use and subdivide it, I'd pay $20K in one-time LUCT when I took it out, and I am fine with that.

What I'm not OK with is somebody saying that because the town put down some gravel and now I could sell that chunk off as a housing lot, I should be taxed on that part of my property as if I already had done so.

So your arguments become clearer - you own property in current use and don't want to pay your fair share of taxes. Of course you're o.k. with paying a LUCT fee when you take it out - because you know that you are going to use it or sell it. Property assessments are based on actual and possible uses for property. The one time LUCT doesn't do other taxpayers any good (20k is high and would mean the property is worth 200k) and the town just absorbs it and spends it on whatever. Depending on how long the property has been in current use and it's assessment, that LUCT is likely only a fraction of what the taxes would have added up to if paid at the normal assessment all along.

People like the idea of open space. Putting property into a conservation easement achieves that goal. Otherwise having property in current use is just a tax avoidance scheme that places an unfair burden on everyone else.

[illtaketwoplease]

Quote:
Originally Posted by illtaketwoplease
There is are many, many property owners who own large tracts of land outside of current use who have no plans to develop it.

Do you see a problem with this? I sure don't. It's their land.

If you don't see a problem with this then why not pay equal taxes like they are?

I can't imagine the thought process which would make me think undeveloped land should be taxed at the same rate as developed land.

Look at any building lot that is not in current use - they are taxed at the developed rate (less improvements). That is the thought process and methodology of assessors. They are taxed at their possible use not actual use.

[Nonesuch]

Getting back on track, none of this suggests a need to pile on with new taxes.

Originally Posted by illtaketwoplease

That information is buried in assessment files that is hard to access and some towns won't provide it without a fee -- if at all. The formula for assessing current use properties is a closely guarded secret of the current use board.

I understand the hunting regs and private property ownership - however the laws and regulations you cite do not jive with reality. The vast majority of land in current use in my town is posted - and I have specifically asked to use property in current use and been told a firm "no". My guess is that the property you refer to using is likely owned by someone who doesn't live nearby... doesn't know you are using it... or the parcel is large enough so that it doesn't bother them. The right to use others property without asking sounds good on paper - but owners hackles get up when you go to use it. I have even had a call from the police asking me what I was doing visiting a non-posted CU property and to get the owners permission for access. I have directly communicated with the CU Board and asked about suitable "recreational uses" and was told that I needed to get the landowners permission prior to use because an actual "suitable recreational use" can be restricted by the owner. So - no - you can't just use someones property if it falls into the category of "suitable recreational uses" -- and that only makes sense

So because your town has problems (I mean really, sounds horribly disfunctional, I would have moved out long ago), we should discard a statewide system which works for the majority of rational towns?

If the state's goal is to incentivize keeping larger lots large and disincentivize development and subdivision, seems perfectly reasonable to me to tax contiguous undeveloped lots based on how they are currently used, rather than taxing them based on the potential highest and best use.

Originally Posted by illtaketwoplease

If you don't see a problem with this then why not pay equal taxes like they are?

Look at any building lot that is not in current use - they are taxed at the developed rate (less improvements). That is the thought process and methodology of assessors. They are taxed at their possible use not actual use.

Right -- the point of current use is to incentivize owners to continue to maintain larger, contiguous tracts of undeveloped land in their current state.

If towns instead bill the owners of undeveloped land at the rate of the "highest, best use", many will end up selling that land off to developers that much sooner.

Originally Posted by illtaketwoplease

But that really is besides the point of the wholly unfair tax breaks given to current use property owners.

How is it unfair? Their land doesn't cost the town anything in services; solely because people who have a certain number of acres get a tax break you are ineligible for get doesn't mean they aren't paying their fair share of the cost of delivering the services they actually use, unless your real goal is just stiggin'it to anybody perceived as being richer than you.

having property in current use is just a tax avoidance scheme that places an unfair burden on everyone else.

Where's the "burden"?

Current use land isn't consuming services, isn't putting kids in the local school system, so it doesn't drive up the town budget. Just because somebody is able to leverage an asset you don't have, doesn't automatically make it an "unfair burden".

Originally Posted by abnfdc

I can't imagine the thought process which would make me think undeveloped land should be taxed at the same rate as developed land.

That's the stuff of equity grievance theory, not good tax policy.

[illtaketwoplease]

So because your town has problems, we should discard a statewide system which works for the majority of rational towns?

If the state's goal is to incentivize keeping larger lots large and disincentivize development and subdivision, seems perfectly reasonable to me to tax contiguous undeveloped lots based on how they are currently used, rather than taxing them based on the potential highest and best use.

The issue is with taxation. It is a "statewide" program that is funded locally. You are not taxed on how your property is currently used - you are taxed at an assessed value of when that property was put into current use and using an unknown formula for calculating current acreage valuations. The "formula" is one of the best kept secrets in NH. Of course it seems reasonable to you -- you benefit financially from it.

Right -- the point of current use is to incentivize owners to continue to maintain larger, contiguous tracts of undeveloped land in their current state.

If towns instead bill the owners of undeveloped land at the rate of the "highest, best use", many will end up selling that land off to developers that much sooner.

That is an assumption. As previously stated - many large landowners already are taxed at the highest and best use and have no intention of selling. Sure some will sell - but more likely is that land will be absorbed by abutters or purchased by conservation commissions. It is not a zero sum game.

How is it unfair? Their land doesn't cost the town anything in services; solely because people who have a certain number of acres get a tax break you are ineligible for get doesn't mean they aren't paying their fair share of the cost of delivering the services they actually use, unless your real goal is just stiggin'it to anybody perceived as being richer than you.

Where's the "burden"?

Current use land isn't consuming services, isn't putting kids in the local school system, so it doesn't drive up the town budget. Just because somebody owns an asset you don't have, doesn't automatically make it an "unfair burden".

To follow your logic - all land that is not developed does not use services - therefore it should also share the same low tax benefits. What would that do to property taxes in your town? Reducing the assessments on all building lots by 90%+? Bet your taxes would go up quite a bit. You for that? I don't have school age children - should I be paying the school portion of the tax bill?



The unfair burden is that some people with "specially classified" real estate are getting taxed at nearly 90% less than others. That means that all the others have to make up the difference. Do you understand that? It is a tax avoidance scheme that many are starting to question. Fair and equitable taxation in NH should be the goal of all residents. I don't know how we get there but overhauling the CU tax system is a good start.

[Nonesuch]

Can we get back to the original question -- are there better ways to keep school costs in check rather than bringing in new taxes or figuring out how to extract more money from any neighbors who happen to own more land than you do?

Originally Posted by illtaketwoplease

To follow your logic - all land that is not developed does not use services - therefore it should also share the same low tax benefits. What would that do to property taxes in your town? .

Nothing, because for the majority of lots in my town, the assessment card shows that the bulk of the value accrues to improvements on the land, not the raw value of the lot, much less the value of "land that is not developed".

Are there towns with a huge number of 9.9 acre lots created before the 1973 law and which don't qualify under the existing CU exceptions and so pay an inflated rate? I suppose such a town might exist, but you'd think market pressure would've gotten people to do land swaps decades ago to min-max the lots to work within the law.

Originally Posted by illtaketwoplease

What would that do to property taxes in your town? Reducing the assessments on all building lots by 90%+? Bet your taxes would go up quite a bit. You for that?

That's not how towns assess lots, nor how they use the assessed value in calculating tax bills.

If 90% of the building lots in town received reduced assessments for the land portion of the valuation, the tax rate would go up, but for the vast majority of landowners, the tax bill would barely change up or down.

Originally Posted by illtaketwoplease

The unfair burden is that some people with "specially classified" real estate are getting taxed at nearly 90% less than others. That means that all the others have to make up the difference. Do you understand that? It is a tax avoidance scheme that many are starting to question. Fair and equitable taxation in NH should be the goal of all residents. I don't know how we get there but overhauling the CU tax system is a good start.

So they're getting a break on the tax rate for their house and garage and driveway and such? No?

[illtaketwoplease]

Quote:
Originally Posted by illtaketwoplease
To follow your logic - all land that is not developed does not use services - therefore it should also share the same low tax benefits. What would that do to property taxes in your town? .

Nothing, because for the majority of lots in my town, the assessment card shows that the bulk of the value accrues to improvements on the land, not the raw value of the lot, much less the value of "land that is not developed".

Nonesuch - I don't know what kind of magic math land you live in - but respectfully suggest you rethink your hypothesis on assessments of building lot value and impact on taxes. It is as easy as reviewing your previous comment on taking a portion of your land out of current use and paying a 20k LUCT fee. You are getting hit with that fee because the market/assessed value is 200k - when the land is not improved (assumes 100% equalized valuations.) That is the value of raw land with nothing on it - like the vast majority of building lots in towns across the state. Put an improvement on the land and the assessed value goes up. With raw land, an assessor assigns a build able portion value to the land (usually based on comparative zoning), and then a value to the remaining acreage -- all based (supposedly) on comparative sales. If you drop the assessments of all building lots in the town to CU values - that is a huge drop in revenue to the town which has to be made up by all of the other taxpayers (their taxes go up). Conversely - if land in CU paid their fair share in taxes - everyone else's taxes would drop because there is more revenue coming into the system. In my town - current use subsidies add approx. $4.90 to the tax rate. On a 350k assessed property - that means that owner pays $1,715 in taxes to make up for the costs that CU landowners are not covering. (it is not exactly that amount but it is close based on the numbers publicly available.) I bet you the vast majority of people reading this don't know that it could have that kind of impact on their tax bill.

I have a power point presentation given to me by one of the most knowledgeable people on the subject explaining the issues surrounding CU - it's impact on local tax rates and values, and why the current funding method is likely unconstitutional and valuation method may be flawed. He has given me permission to share it and I would post it but there is no way to upload it. Anyone interested can send me a PM with their email address and I'll send them a copy to view. It might take me a while to respond but it will eventually get out.

[chris410]

Originally Posted by illtaketwoplease

Nonesuch - I don't know what kind of magic math land you live in - but respectfully suggest you rethink your hypothesis on assessments of building lot value and impact on taxes. It is as easy as reviewing your previous comment on taking a portion of your land out of current use and paying a 20k LUCT fee. You are getting hit with that fee because the market/assessed value is 200k - when the land is not improved (assumes 100% equalized valuations.) That is the value of raw land with nothing on it - like the vast majority of building lots in towns across the state. Put an improvement on the land and the assessed value goes up. With raw land, an assessor assigns a build able portion value to the land (usually based on comparative zoning), and then a value to the remaining acreage -- all based (supposedly) on comparative sales. If you drop the assessments of all building lots in the town to CU values - that is a huge drop in revenue to the town which has to be made up by all of the other taxpayers (their taxes go up). Conversely - if land in CU paid their fair share in taxes - everyone else's taxes would drop because there is more revenue coming into the system. In my town - current use subsidies add approx. $4.90 to the tax rate. On a 350k assessed property - that means that owner pays $1,715 in taxes to make up for the costs that CU landowners are not covering. (it is not exactly that amount but it is close based on the numbers publicly available.) I bet you the vast majority of people reading this don't know that it could have that kind of impact on their tax bill.

I have a power point presentation given to me by one of the most knowledgeable people on the subject explaining the issues surrounding CU - it's impact on local tax rates and values, and why the current funding method is likely unconstitutional and valuation method may be flawed. He has given me permission to share it and I would post it but there is no way to upload it. Anyone interested can send me a PM with their email address and I'll send them a copy to view. It might take me a while to respond but it will eventually get out.

So you would rather see all current use landowners pay the same as non current use landowners.

So whats the incentive to not further subdivide these large parcels and over develop them, more suburban sprawl, more 2 acre lots with 2k sq foot homes, more roads to maintain more kids to schools, more public services needed...

Do you not see how this is just going to cause everyone's taxes to go more? at the cost of losing one of the perks of living in New Hampshire? Open land to roam on (walking, hiking, hunting, etc.) That is not a cost burden to the state or towns? I live in the seacoast and I have hundreds of acres of current use land behind my house, none of it is posted, people use it all the time for the walking trails and hunting. Sorry but if the owner has to take it out of current use, its going to get turned into suburban sprawl.. that is a fact..

On that note, comparing raw land in current use status to raw land not in current use, the savings are not as huge as you are claiming them to be. Taking away those small savings from the land owners isn't going to solve the big issues in some of these small towns with school budgets that are out of control..

Back to the original thread, an income tax isn't going to help either and we can thank CT for being the guinea pig on that one. Keeping school budgets in check and pooling resources and taking a regional approach with other towns is a better approach. For example a town of 5,000 people does not need a 5 million dollar high-school...

[homestead123]

Ooooofffaaa this one poster is so annoying. No wonder you were denied CU.
You sound jealous of those who have more. Sorry you didn’t work hard enough to attain more wealth.
Who owns these tracts of land. Let’s see.
Has to be a home with 10 acres not in cU. Your argument”wahhhhh but they own 250 acres of woods”
Um I’m gonna take a little leap and guess that if they could afford the 260 acres and a home, they have money, and their residence may reflect that. So while you may be paying a low RE tax of $3000, they may be paying $12,000 for their place.
Some people pay more some less.
NH would be foolish to enact an income tax. Come to NY. 8%+ sales taxes, income taxes, RE taxes on top of it all. Most people in my area are paying a minimum of $10,000. I know plenty who pay between $15-21,000!
Pa. Has high RE taxes as well.
Your RE tax may “seem” high, but it is not when you factor in all the other taxes.
How much do you really think your taxes will drop if income tax is put in place?
If you don’t make much income and are concerned about taxes then come to NY or Vermont. They love supporting those in need.
You have a beautiful state, don’t screw it up.

[illtaketwoplease]

So you would rather see all current use landowners pay the same as non current use landowners.

Yes. What's the problem with that? Why should someone who owns more property pay less taxes? I'm not talking about a little bit less - it is on average 90% less. Most people with land in CU can easily pay what everyone else is, and can well afford it.

So whats the incentive to not further subdivide these large parcels and over develop them, more suburban sprawl, more 2 acre lots with 2k sq foot homes, more roads to maintain more kids to schools, more public services needed...

You are making assumptions that land in current use will be developed and that any development will add costs. There are many large acreage owners who pay regular taxes and don't develop their property. Land will get absorbed into neighboring parcels, or put in conservation. People without kids will build houses making it a net gain to the town. Current use does not restrict development forever - it only delays it until a property owner wants to take it out. It is a tax avoidance scheme for the wealthy and well connected.

The argument that vacant land doesn't cost anything to the town is false. You still have to maintain and plow roads to get to it, cover the entire town with fire dept. services, share the support for low income households, etc., etc. What CU proponents really hone in on is that vacant land has no houses so therefore there are fewer people and most importantly children to attend schools. That is where the costs mostly lie. Well - other vacant land outside of current use does the same thing as well as any resident that owns property but does not have kids in school. Should they not get the same preferred tax treatment because they are not adding costs? You want others to pay -- but not CU owners ? CU is a racket - plain and simple.

I live in the seacoast and I have hundreds of acres of current use land behind my house, none of it is posted, people use it all the time for the walking trails and hunting. Sorry but if the owner has to take it out of current use, its going to get turned into suburban sprawl.. that is a fact..

Walking trails and open hunting on the same property? Doesn't sound safe to me. There is absolutely no way you could know that raising taxes on a property to an equivalent level as everyone else will result in it being developed. There are hundreds of thousands of acres not in current use that sit undeveloped. The owners want to keep it as it is - not hard to understand. And development is going to happen - and I've seen some owners get offers they felt too good to pass up. It wasn't higher taxes that made them sell - it was their desire for a big payday. CU allowed them to carry property at nearly zero costs to ride value appreciation - all at the expense of other taxpayers in town.

The current use law was established at a time before most towns had formal zoning. Since then, towns have enacted zoning laws to restrict and manage development. CU is a legacy program that needs to be overhauled. It is a state mandated program that needs to be funded by all residents of the state - not local property owners.

On that note, comparing raw land in current use status to raw land not in current use, the savings are not as huge as you are claiming them to be.

Then why argue over such minimal savings? If it's minimal then the owners should have no problem paying the difference. The fact is -- it isn't minimal and in my town having CU owners pay at current assessment rates would drop the tax rate by $4 bucks. That is not minimal.

I'll also point out that people with vacant land in current use don't have to worry about school budgets, town budgets, highway budgets, low income costs, etc. These owners are mostly well-to-do and well connected. If you want to fix the NH tax system - have these people pay the rate that everyone else is paying and you will see them become more vocal and participatory in finding a solution to the NH property tax problem.