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Property Taxes: Any Relief in Sight?

Article by Adrienne Mallinson, DRC Staff Attorney, 10-21-2005

These days, many New Hampshire homeowners grumble about their property taxes. But between education funding crises and rising appraisals, the hardest hit are often those who can least afford it. Relief may be available, but how much depends on where you live. Here is a brief guide to some of the avenues homeowners with disabilities should explore.

Low and Moderate Income Homeowners Property Tax Relief

The statewide education tax is a relatively small, but highly controversial, part of your total tax bill -- perhaps $2 to $3 per $1000 of assessed value. There is relief available, however, and it is worth pursuing. Relief is designed to help moderate to low income homeowners with household adjusted gross incomes of $20K or less (if single) or $40K or less (if married).

The good news is that your relief check is tax free, and you do not have to pay your property tax upfront in order to be eligible (but you still have to pay your taxes by the due date). The actual amount is calculated by a complex and ever-changing formula and capped at $100,000 of assessed value. So, for instance, you may get less money if your income rises, but no extra money if your property value rises. Still, the check could be worth an extra $200 or so.

To file, fill out Claim Form DP-8, which is available at local town offices or online, and send it in between May 1 and June 30 after you get your final property tax bill. For more information and forms, visit http://www.nh.gov/revenue/forms/low_mod_program.htm, or call the N.H. Department of Revenue at 271-2191.

Local Property Tax Exemptions for People with Disabilities

Your town hall is, of course, responsible for most of your property tax, and municipalities have lots of options. One state law, RSA 72.37-b, allows towns to adopt exemptions for homeowners who qualify for disability benefits under Social Security (either SSDI or SSI), and have lived in New Hampshire for five years. The exemption also applies if your spouse of 5+ years owns the home.

Unfortunately, because it is up to individual communities to pass the law, many residents have no access to this exemption. In 2004, the majority of municipalities had not adopted the exemption, including Concord, Laconia, Berlin, Conway, Hooksett, Derry, and Lebanon.
Where this law does exist, there is a great deal of variation. For example, Manchester excludes from taxes the first $90,000 of property value for disabled residents. In Nashua, the exemption is $100,000; in Hanover, $130,000; in Durham, $32,000. Income and asset limitations also vary so check with your Assessor’s Office.

The New Hampshire Department of Revenue publishes a table of community exemptions, titled “Assessment Report”, which is available at http://www.nh.gov/revenue/property_tax/equalization/2004/2004.htm. 2005 data will be available in a couple of months.

Exemptions for Blind, Deaf, and Hard of Hearing Homeowners

There are other provisions under state law that towns can choose to adopt. Many towns have enacted tax exemptions for legally blind homeowners, under RSA 72:37. Concord, for instance, has a $99,400 exemption for blind homeowners who have lived in-state for five years. An exemption for deaf or hard of hearing homeowners may be available in other communities, such as Dover. Again, dollar amounts and income qualifications vary by town.

Home Improvements

If you or your family member use a wheelchair, another state law, RSA 72.37-a, can help. Any access improvements you make can be deducted from your total home value. In towns with exemptions for the deaf, you might also be able to deduct home improvements designed for deaf family members.

Disabled Veterans

All veterans are entitled to a tax credit of between $50 and $500, depending on what your town has decided. Furthermore, if you were discharged with total and permanent disability, your town may offer a more substantial tax credit (up to $2000 by state law RSA 72:35). Concord and Salem offer a $2000 credit against property taxes to disabled veterans; in Manchester, it’s $1600. Veterans who are paraplegic, double amputees, or blind are exempt from all property taxes.

Exemption for Seniors

Our cities and towns are considerably more generous once you get to 65 and up. For the over-65s, all municipalities have exemptions. A recent UNH study compared senior exemptions with house prices and found that Manchester, Nashua, and Portsmouth were the most generous communities, while Waterville Valley, Hebron, and Center Harbor were the least. Senior exemptions also rise as you get older.

Tax Deferral and Abatement

One other program included in most municipal schemes is tax deferral for homeowners who are elderly or have a disability. This program offers a way for residents with disabilities to put off paying taxes that threaten serious financial hardship or loss. The catch is that when you sell your home, all the back taxes become due, with interest. See your town assessor for more details.

Additionally, you could request an abatement of property taxes, based on “good cause.” This means showing either inability to pay taxes, or that the town’s valuation of your property is too high. In the latter case, you would need to show that your home was overvalued compared to similar property.

For all local tax relief, it is important to make sure you file an application before the deadline. To get relief from your 2006 taxes, you must file before April 15, 2006. This is a change from the old law, which allowed you to file until March 1 of the following year. Also remember that if your application is rejected, you can always appeal to the Board of Tax and Land Appeals or the Superior Court for your county.

Property tax rules change frequently, so talk to your Assessor’s Office about the current rules and eligibility. The following UNH study discusses the impact of tax breaks for residents who are elderly: New Hampshire Center for Public Policy Studies: Shifting the Load: Costs, Effects, and the Potential Impact of Property-Tax Relief for New Hampshire’s Seniors, available at http://www.unh.edu/nhcpps/localgov.htm.