Tuesday, March 1, 2011

Think you should be able to pay less property tax but don't know what to do? We have five suggestions to help lower those costs. Pictured here is one such remedy - Hale's Location, home to one of the state's lowest property tax rates.

An overview of Hale's Location, which holds custom homes on a nine-hole golf course in a valley rimmed by mountains.

A home at 49 Falcon Way in Hale's Location. $699,000 for sale by owner, (603) 356-4798. 3,100 square feet, 3 bedrooms, 3 baths. Taxes: $1,833. Free gold included in annual HLOA of $1,750.

Home at 10 Falcon Way in Hale's Location. $495,000. MLS#2787974. 1,905 square feet, 3 bedrooms, 2 baths. Taxes: $1,328. Free golf included in annual HLOA of $1,750.

Home at 30 Samuel Hale Drive in Hale's Location. $599,900. MLS# 2811939. 1,905 square feet, 4 bedrooms, 4 baths. Taxes: $1,743. Free golf in annual HLOA of $1,750.

Home at 197 West Shore Road in Bristol. $525,000. MLS# 4011083. 1,872 square feet, 3 bedrooms, 2 1/2 baths. Taxes: $7,793. 115 feet of water frontage on Newfound Lake.

Home at 11 Chipmunk in Moultonborough. $675,000. MLS# 4027797. 1,060 square feet, 3 bedrooms, 4 baths. Taxes: $4,884. 100 feet of water frontage on Lake Winnipesaukee.

Condominimum at 19 Stratham Green in Stratham. $254,000/ MLS# 4043034. 1,800 square feet, 2 bedrooms, 2 baths. Taxes: $5,349.

Home at 19 Grandview Avenue in Berlin. $369,000. 2.4 acres. MLS# 2821711. 3,051 square feet, 4 bedrooms, 2 baths. Taxes: $8,692.

Think you should be able to pay less property tax but don't know what to do? We have five suggestions to help lower those costs. Pictured here is one such remedy - Hale's Location, home to one of the state's lowest property tax rates.

Contents; Tax havens, easements, abatements, re-assessments, exemptions and current use. Warning: Take with a grain of salt.

No.1
Move to a Tax Haven

Tax rates vary from zero to almost $32. So check our list for the lowest tax rates across the state. Warning: It is still all about location, location, location.

It's not just the custom homes on a nine-hole golf course in a valley rimmed by mountains. Or the lake, forest trails, skiing, tennis, friendly neighbors and elegant hotel.

Just a couple of miles from the village of North Conway, this place feels remote. A private road sheltered by white pines opens to panoramic mountain views. "It's like a secret garden nobody knows about," says Brenda Lyon, a local real estate agent.

Jerry Meiliken has lived in Hale's Location for nearly a decade. From his house, he has clear views of White Horse Ledge, literally at the edge of the White Mountain National Forest. The 800-foot granite cliff is popular with rock climbers, hang-gliding enthusiasts and large soaring birds. When the light is right, an image of a horse appears in the granite rock face.

"It's an attractive place to live," says Meiliken.

Also attractive: the comparative costs of living in Hale's Location.

Meiliken's three-bedroom home on the golf course is valued at nearly $700,000 but with Hale's Location's bargain property tax rate of $3.04, his property taxes are less than $2,000 a year. In other New Hampshire towns, he could be paying four to 10 times that amount for a house of the same value.

"Low taxes are an integral part of living here," says Meiliken. "It's not the lifestyle reason, but it's the pocketbook reason."

Property tax rates for the state's 234 towns and cities, in 2010, ranged from $8 per thousand dollars of assessed value to as high as $31. So why is Hale's Location so inexpensive?

Meiliken and his neighbors can thank King George III. He granted 1,200 acres to the Hale family in 1771. Like many land grants in more remote parts of New Hampshire, Hale's Location was never incorporated as a town or city.

There are 25 unincorporated areas in New Hampshire, sometimes referred to as townships. Many include the words "location," "grant" or "purchase" in their names. Most are uninhabited and have no taxable property. Some have revenue from other sources, such as a timber tax.

In New Hampshire, residents of an unincorporated area contract for municipal services from a nearby town. The rate is based on usage, including number of students in public school that year. This often works out to much less per capita for residents of unincorporated areas than for the average citizen of an incorporated town.

According to Brenda Lyon, the tax rate has never been higher than $4 in the 10 years she has been selling property in Hale's Location.

"Taxes affect disposable income. A home in Hale's Location is affordable to maintain. Carrying costs are minimal," says Lyon.

Of course, affordability is a relative term. Right now, houses for sale in Hale's Location range from $400,000 to more than $2 million. Lots are $190,000 to $225,000. But Meiliken, who is considering a move to the desert in the southwest to be closer to family, says Hale's Location is a deal.

"For the same house, the ease of golf, the prettiness of the place, the cost will never be matched," he says.

Phase I began in 1985 when developer Robert Carlton plotted the original 117 Hale's Location home sites around the golf course. An annual homeowner fee of $1,750 covers water, roads, trash pickup and unlimited free deeded golf. Phase II is called Boulder Ridge; the five-acre sites require individual wells for water.

Homeowners can also buy a membership at the on-site White Mountain Hotel for $325 per year and use the pool, Jacuzzi, tennis courts, fitness and recreation rooms and groomed cross-country ski trails.

According to Lyon, about one-third of the homeowners live at Hale's Location year round. Others are seasonal residents and second-home owners. She has seen a shift in age from older residents to more people in their 40s and 50s.

Residents are friendly, says Meiliken. There is a summer party at the gazebo and a Christmas party at the hotel. Golf can be played at any level of experience. "Thursdays anyone can join in and play. People are paired up with others. It's easy to fit in."

For peace and quiet, Meiliken hikes into the mountains. "You can pick up a trail and take it right into the Motes."

Historic Background

Stephanie Seacord is a destination marketer with a particular interest in history and heritage travel in New Hampshire. She has been trying to help people discover Hale's Location. "The combination of new home sites with old history is very special," says Seacord.

Hale's Location originated as a land grant of 1,200 acres from the King of England to Major Samuel Hale in 1771 for his service in the French and Indian Wars.

Hale was a Harvard-educated schoolmaster in Dover, N.H., when preparations began for the siege and capture of French-controlled Louisburg on Cape Breton Island, in what is now Nova Scotia. Hale raised a company of nearly 100 Dover men and helped capture the fort in 1745.

When King George's War was over, Hale became master of a Latin grammar school in Portsmouth, N.H., and eventually an American patriot. It was his handsome young cousin Nathan Hale, however, who was caught spying and executed by the British. Just before his hanging, Nathan spoke his famous words of defiance: "I only regret that I have but one life to lose for my country."

The Hale grant included a provision that the family conserve the pine trees and make them available as ship masts for the Royal Navy. This provision was not enforced after 1776.

An old burying ground for members of the Hale family coexists with new homes and a four-season country club lifestyle at the edge of the White Mountains in Hale's Location.

To visit Newfound Lake is to step back in time - all the way to the Ice Ages. Formed by glaciers, fed by springs and mountain streams, pristine Newfound is deep, clean and scenic. And, relative to more famous lakes, it's cheap.

Newfound Lake, located 20 minutes from Plymouth, an hour north of Manchester, is the fourth largest lake in New Hampshire. It is two-and-a half miles wide and seven miles long, with 22 miles of shoreline. The setting is rural. The population in Bristol, the biggest town on the lake, is 2,500 in winter and 10,000 in summer.

Compared to Newfound, Lake Winnipesaukee has many more access points for boats, beaches for public swimming, summer rentals, towns and docks and restaurants.

"Newfound has nowhere near the amenities of Winnipesaukee," says local real estate agent Randy Colby.

This is a selling point? It can be.

Similar waterfront property can cost half what it does on Winnipesaukee, according to Colby. Additionally, two of the four towns bordering the lake, Hebron and Bridgewater, have some of the lowest property tax rates in New Hampshire - $7.59 and $8.40, respectively.

Colby grew up in the Lakes Region and lives in Bridgewater with his wife and four children. Formerly a mechanical engineer, he now sells real estate, takes care of seasonal property, plows snow and enjoys swimming, hiking and biking.

"Most jobs in the area relate to services for vacationers. The second-home market has given me a job," says Colby. His house on five acres near the lake is worth around $200,000; he pays less than $2,000 a year in taxes.

Low Tax Locations

(2010 information from the N.H. Dept. of Revenue Administration)

Property tax bills are issued by municipalities and are based upon assessed valuation. The following is a list, by region, of municipalities with a total property tax commitment of less than $12 per one thousand dollars of assessed valuation. (*U denotes unincorporated areas; only populated areas are included.)

Seacoast:

New Castle 5.80

Newington 9.12

Rye 9.99

Lakes:

Hebron 7.59

Moultonborough 8.12

Bridgewater 8.40

Tuftonboro 8.49

Sandwich 10.81

Eaton 10.85

Freedom 10.90

Center Harbor 10.95

Wakefield 11.00

Wolfeboro 11.04

White Mountains:

Hale's Location (U) 3.04

Bartlett 9.15

Lincoln 9.20

Easton 9.43

Albany 10.00

Jackson 10.00

Monroe 10.05

Chatham 11.14

Waterville Valley 11.95

Great North:

Cambridge (U) 0.0

Millsfield (U) 0.0

Wentworth Location (U) 4.89

Hart's Location (U) 7.26

Dixville (U) 8.30

Errol 9.56

No. 2
Apply for a Tax Abatement

There may still be time to apply for an abatement on last year's property assessment. The deadline is March 1. You may need to back up your claim with some documentation.

"The burden of proof is on the taxpayer," says Robert Gagne, chairman of the Board of Assessors in Manchester. "It's not enough to say, 'I think my house is worth $150,000 because a house down the street just sold for that.'

Give me some decent data." Assessments of similar properties can be found on the city's website or an applicant may bring in an outside appraisal. "Somebody might say, 'I tried to refinance my house and had to pay for a bank appraisal,'" says Gagne. "If they provide that, we'll review that information." In some cases, however, it might be a matter of simply correcting an error in the records. "We may have you listed for a three-car garage and you have only a one-car garage," Gagne says.

The town or city must grant or deny the application by June 1. The applicant has until September 1 to appeal a denial to either the Board of Tax and Land Appeals or to Superior Court. If the abatement is granted, the town or city must refund any excess tax paid, with interest. But many abatement requests are doomed by their nature to an early demise. David Cornell, a former Manchester assessor now with the state Department of Revenue Administration, recalls people basing their requests for abatements on complaints about snow removal on their streets. "It's a matter of explaining what the abatement process is," he says. "It's not a way to assess whether your road is getting properly plowed." Sometimes an abatement application can result in a higher assessment in future years, Gagne says.

"There are times when we go out and, lo and behold, we find we didn't have that extra bathroom listed or that finished basement or whatever it is that might cause a change to a higher assessment going forward." Building permits are not always a reliable indicator of where additions and improvement to properties have been made. "Not everybody pulls a permit," Gagne says.

- Jack Kenny

No. 3
Apply for Current Use

New Hampshire law permits owners of undeveloped land to qualify for taxation of the property at its current use rather than market value.

The Current Use Board in the Department of Revenue Administration sets the assessment rates each year for forest, farm and wetlands that qualify for current use assessment.

Generally the land must be 10 or more contiguous acres, though smaller parcels of wetlands or land devoted to agricultural use may also qualify. An owner who takes his land out of current use by subdivision or development for residential or commercial use must pay the town or city 10 percent of the full market value at that time. Though adopted as a measure to preserve woodlands and open spaces, the current use provision also provides a net savings to municipalities, according to numerous Cost of Community Services studies, by keeping land out of residential development.

"You don't have to send (more) children to the school district, you don't have to have waterline extensions," says City Assessor Laura Thibodeau of Keene, who is also a member of the Current Use Board.

No. 4
Find An Exemption

State law allows exemptions of the assessed value of homes owned by various categories of citizens.

The legally blind or deaf may qualify for a minimum exemption of $15,000, though any city or town may grant additional exemptions. The elderly and disabled may also qualify for exemptions, though the amount varies from one municipality to another.

Exemptions are available in some communities for those who power or heat their homes with renewable energy resources, such as wind, solar or wood. There are limits, however, to what may be done to offset a taxpayer's financial burden, notes Paul Martineau, an assessor in Manchester for 21 years. Martineau, now the city's Welfare Commissioner, recalls one elderly resident who gladly accepted a lien on his house, with the taxes to be paid with five percent interest when the property was eventually sold. The next day the man called again. "He said, "I've got to buy a pickup truck. Do you have any more of that low-interest money?'"

- Jack Kenny

No. 5
Bite the Tax Bullet

All the municipalities have a legal obligation to provide assistance to the poor. There's no specific dollar amount, but the less people get from the state, the more they depend on local
welfare services.

A popular saying has it that the effluence (in polite language) rolls downhill. Given the size of budget deficits looming over the State House, that may soon be more than a crude metaphor.

One bill submitted in the current session of the Legislature "would transfer responsibility for approving septic systems from the state to municipalities," says Cordell Johnston, government affairs counsel for the New Hampshire Municipal Association. The new Republican leadership in the House and Senate has said it will not "downshift" responsibilities to cities and towns, but property taxpayers have already felt the impact of budget cutting done by the Democratic majority during the past two years. The state's contribution to the pension plans of local teachers, police and firefighters, for example, was reduced from 35 percent of the employer's cost to 30 percent last year and 25 percent this year. The estimated cost to cities, towns and counties in making up the difference is estimated at $9 million for 2010 and $18 million this year, Johnston says. While the state will continue to fund "adequate education," a bill to remove arts education, world languages, health and technology education from the state's definition of adequacy has raised concerns about a potential reduction in state aid to local school districts. Health and Human Services, the largest state department, will almost certainly face significant budget cuts. A bill reducing state Medicaid eligibility from five to two years could impact local welfare rolls, Johnston says.

"All the municipalities have a legal obligation to provide assistance to poor," he says. "There's no specific dollar amount, but the less people get from the state, the more they depend on local welfare services."

But with estimates of revenue shortfall for the next biennium ranging anywhere from $600 to $900 million, there are "no sacred cows" in any department's budget, says Rep. Neal Kurk, R-Weare. Everything is on the table - except tax increases.

"The people made it clear that increasing government and increasing taxes and fees to pay for it is not acceptable," says Kurk, referring to last fall's elections. "That's why we have the super majority we do." NH

- Jack Kenny

Top Ten

USAA and Military.com recently named two counties in New Hampshire as one of the Best Places for Military Retirement. Rockingham and Strafford counties were listed among the top 10 medium-sized metropolitan areas.

USAA and Military.com worked with Sperling's Best Places to determine the variables for 379 major U.S. metropolitan areas. The areas were evaluated for general quality of life issues and variables important to military retirees, including military pension taxation, military base and Veteran's Hospital proximity, economic stability and unemployment rate, housing costs and appreciation, crime, schools and affordability.

Highest Tax Rate

The city of Berlin has the highest tax rate in New Hampshire at $31.70. The city of Claremont's rate is $31.34. Pittsfield ($30.66) and the city of Keene ($30.17) are the only other municipalities over $30. Of New Hampshire's 13 cities, Portsmouth ($17.41) and Manchester ($17.81) have the lowest rates.