New Hampshire property tax and equalization rates are a common topic for home owners, and home buyers. New Hampshire property tax and equalization rates can seem to be a little mystifying. There is often an inverse relationship between property tax rates and property values, with lower tax rates typically correlating to higher home values. For example, in 2024, the average sales price in New Castle was $2,483,923, while in Brentwood, it was $686,387. If market values align perfectly with a town’s assessed values, homeowners in New Castle would pay approximately $13,000 per year in property taxes ($5.39 x 2,483), whereas in Brentwood, the cost would be just over $17,000 annually ($25.17 x 686). However, a factor known as equalization plays a role in determining how a property's assessed value compares to its market value. In 2022, Brentwood’s equalization rate was 66.2%, meaning properties were assessed at 66.2% of their actual market value.

It's important to note that a town's property tax rate is not necessarily a reflection of the quality of its schools, infrastructure, or municipal services. For example, Newington, NH, has a relatively low tax rate ($7.88) while sending students to highly regarded schools in the Portsmouth SAU 50 district. Typically, school funding accounts for 60-75% of a town's total property tax burden. Communities known for strong school systems and lower tax rates include Rye, NH ($9.22) and York, ME ($8.40).

Higher tax rates are often found in towns with larger local governments, such as Somersworth, NH ($18.70), or those with colleges and universities, like Durham, NH. Property tax rates generally increase over time, with the most significant jumps occurring due to new school construction, public safety buildings, and other major capital improvements.

Understanding how property taxes impact home values is essential when buying or selling real estate. Staying informed about tax trends and equalization rates can help homeowners make more strategic decisions.