New Hampshire does not have a state income tax or sales tax on retail products and much of the state’s fiscal revenue comes from property taxes. According to the Tax Foundation, while New Hampshire has one of the lowest per capita tax rates in the U.S. ranking 46th among the states with an average state and local tax rate of 7.6%, the state’s property taxes are among the highest in the country, ranking 4th in 2008. But there is some property tax relief for certain homeowners who qualify.
Low and moderate income homeowners
Single taxpayers with income of up to $20,000 a year and families with income up to $40,000 can apply for property tax relief. The amount of the reduction in property taxes depends on income level, the net assessed value of the home and the equalized town tax rate. To qualify, you must have owned and resided in the home as your homestead subject to the state education property tax on April 1 of the year you file the claim. To claim this relief, you must file Form DP-8 – Low and Moderate Income Homeowners Property Tax Relief between May 1 and June 31. You should note that this form is no longer automatically mailed to you if you qualified last year.
If you are 65 or older and have lived in New Hampshire for the last five years, you could qualify for the elderly exemption, which reduces the assessed value of your home for property tax purposes. The amount of the exemption and the eligibility rules vary among towns and cities in New Hampshire. According to New Hampshire Legal Assistance, the minimum income limit is $13,400 for a single homeowner and $20,400 for a married couple. This income includes Social Security benefits. To apply for this exemption you need to file Form PA-29 – Permanent Application for Property Tax Credit/Exemptions with your city or town by April 15th before the tax rate is set.
Physically handicapped exemption
If you make improvements to your home to help a person who lives there who has a disability or deafness, you may qualify for an exemption from property tax on the value of the improvements. To apply for this exemption you should file Form PA-29.
Deferral for the elderly and disabled
New Hampshire homeowners who are 65 or older, or eligible for Social Security or disability benefits may qualify for a deferral of payment of their property taxes. If you qualify for the deferral you do not have to pay the taxes until you sell the property or after your death. A lien is placed on your property and interest is charged at 5% per year on the taxes you owe. To qualify for this deferral you must have owned the home for at least five years, or one year if you are disabled. The total taxes you can defer cannot be more than 85% of the equity value of your home. To apply for the deferral, you need to file Form PA-30 – Elderly and Disabled Tax Deferral Application by March 1st after your tax notice.
Veterans and surviving spouses can qualify for a $50 credit against the property taxes on their home. There is a $700 credit for veterans who are totally disabled due to a service-related injury, and for surviving spouses of veterans who were killed or died while on active duty. The surviving spouse is eligible for this credit as long as he or she remains single. The town can vote a higher credit in both cases. Veterans who are blind, paraplegic or who have a double amputation from their military service are 100% exempt from New Hampshire property tax if they live in a specially adapted home provided with Veterans Administration assistance. To claim these credits or exemption you should file Form PA-29.
Other property tax exemptions that may be adopted by the municipality include an exemption of $15,000 for blindness, deafness or severe hearing impairment. There are also exemptions for persons disabled under the Federal Social Security Act, and a tax exemption for installing a wind, solar, or wood-heating energy system in your home. To claim any of these exemptions you should file Form PA-29.
Form DP-8 – Low and Moderate Income Homeowners Property Tax Relief – New Hampshire Department of Revenue Administration
Form PA-29 – Permanent Application for Property Tax Credit/Exemption – New Hampshire Department of Revenue Administration
Form PA-30 – Elderly and Disable Tax Deferral Application – New Hampshire Department of Revenue Administration
Low and Moderate Tax Relief Program – New Hampshire Department of Revenue Administration
New Hampshire – Tax Foundation
Overview of New Hampshire Taxes – New Hampshire Department of Revenue Administration
Senior Citizens Law Project – New Hampshire Legal Assistance