How about those property taxes?
 

I touched base on this in another thread but I'd really like some lake property owners insite on this.............

What are your feelings about the high taxes for waterfront property? Do you think they are fair? I know people that have owned lake side property for years but had to move after they retired.

What is your breaking point? What would it take to happen that you would finally ban with your neighbors and say, "Enough is enough. Too many of us are losing our homes."

It seems as though the common man is getting pushed out and the majority is just letting it happen.

Is there a better way to structure your taxes?

Thanks,

CZ

Oh, please.

You live in a state without a sales tax or an income tax.

What, do you think money grows on trees?

There's no free lunch.

So long as there are buyers for any lakefront property which is sold, it will be taxed heavily: as well it should be.

Location, location, location.

So what........you think if NH adds an income tax & a sales tax & a capital gains tax too.....that things are going to be better ? If I'm not mistaken Connecticut is the highest taxed state in the nation. How has that income tax that was imposed on your state worked out fo you folks down there.....has it cut your property taxes ?
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Yamaha Dt125

Capt. That is a good question. I have wondered about . WHat is the breaking point for everyone? Even if you CAN afford it, how many people are going to be willing to pay such high taxes, especially those who only use them a couple of months a year? However, I agree with Irish, if we add a tax, they will just spend more. Oh sure, taxes may go down for a year or two but then they will go right back up. What we need to do is tell government to stop spending! But to do that, we can't be apathetic, we all need to get out there and tell the selectmen, legislators, etc.

Representation
 

In NH, property tax is based on value, and its part of the charm and the challenge of living here. Waterfront properties have a higher value that surrounding homes, so pay a higher percentage of the town's expenses. That probably won't change. What will change however is the make up of who lives in the waterfront homes. More and more telecommuters and retirees are making the lakefront their full time residence. With this comes local voting rights and increased control over spending in their local government. The change could backfire, as it has in Southern NH, if new residents ask more from their town. More likely, they will work to keep spending down and question excesses that have been rubberstamped in the past.

Go For Broke?
 

Just a few years ago, I mentioned being content that my projected Social Security income would pay my property taxes.

There's so much bulldozing going on around here, that now I see that even Social Security (which I will be paying taxes on) won't be enough to pay for my Lakes Region "cost of admission". (The property tax with no corresponding adjustment for cost of living).

Is a "reverse-mortgage" an alternative to going broke? :confused:

Perhaps I didn't word my initial post very well, the point I was trying to make is that I think it's sad to see so many folks lose their waterfront homes (that have been in their families for years) to high taxes.

I was just looking for opinions as to possible fixes to the problem.

For those of you with deep pockets I guess you can't see the little guy's plight, obviously the problem hasn't always been this way or all these little guys wouldn't be getting forced out. I hate to see "nice people" lose their retirement homes because of the "view".

CZ

http://articles.moneycentral.msn.com...sForTaxes.aspx

http://www.retirementliving.com/RLtaxes.html

http://www.nj.com/opinion/ledger/edi...t04282004.html

I suppose we were "lucky" in a way in that when we built our mcmansion we knew that high property taxes were a reailty and planned accordingly financially. Yes it is sad to see folks losing their properties because of it. The "little guy's" plight is one playing out all over the country in one way, shape or form in many communities...it's not just limited to real estate in typically vacation destinations. As far as answers or solutions?? I suppose one has to look at the town's themselves, for they are the ultimate landlords. I have many other solutions but I'm watching the butler out the window wash the jaguar and I see he's missing a few spots, and that damned maid can't seem to make the beds correctly. It's so hard to find decent help these days. :D

Touche, Kona Chick. Touche!

The ONLY way to end this property tax nightmare is to end public education. Pay for your own kids for 12 years at the many private schools that would pop up.....and you would be done with it. Simple as that. If you have one kid, it's an easy ride. If you have 5 kids it will cost you ( a true user fee) but the payments will end, and you will be free from paying when your kids are out of the system.

Most towns in NH, and the nation for that matter, spend close to 80% of all collected taxes on schools & education. Think of the freedom we would have if we could get this education monkey off the tax-payers back......I know, it's not going to happen. But it's really the only solution that would work.
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Ferrari 375 F1 History

Value or Taxes?
 

The waterfront tax rate at the lake is a little less than 1% of value. That means a $100K house will pay $1,000 in taxes; a $1M house will be taxed at $10,000. This is a lot better than Mass (proposition 2 1/2 is designed to keep taxes under 2.5%)!

So is it the value, or is it the "high taxes"? Before everyone keeps complaining about the taxes, look at the cost of all the other things. What do you pay for your car or truck? Your boat? Your jet ski? Your day on the slopes? What does it cost for a week of groceries? Costs and prices keep going up; and the value of a lakefront home also keeps going up.

I was upset that my taxes went from $8000 to $14,000 in the 4 years I owned my waterfront home. I got over it when I made a $400,000 profit on the sale. You can't have it both ways.

Mass 2 1/2 keeps the levy from rising more than 2.5 % in one year unless approved by the voters. It doesn't mean you pay 2.5% of the value of your house per year. My Mass house tax is less than 1% of the value per year. I actually think a law like 2 1/2 would be good in NH, but don't expect the politicians to advocate for it.

Bingo, thank you.

Personally, I've owned in the Lakes region for about 8 years now, I knew what I was getting into and planned for it. I don't see that lake properties are targeted per se but just worth more than properties away from the lake. My taxes have gone up, but so has the value of my property.

Time and time again I hear of properties that have huge increases in value over a short period of time. Usually these properties have been underpaying taxes for years, forcing the rest of us to pick up the slack.

A waterfront home is an investment in addition to being a great place to share with family and friends. Our property taxes are moderately higher now than when we lived in Mass. With no sales tax or income tax we're ahead. In addition our lakehouse has appreciated much more already than our Mass. suburban house did in years. Part of the reason is living in Moultonborough which has a much better tax rate than other towns. It's sad when people have to give up their properties but frequently it's a choice to pull out the cash and make other lifestyle decisions. Everyday people make decisions to downsize, keep the car longer, etc. I suspect at some point I will too. But for now I love where I live and it's increasing in value. My property tax is a lifestyle tax.

????
 

Where do you get your math from, in Laconia,
I am values at $155,000 for the bldg only (condo cottage) and I am paying just over $2,500 for the real estate taxes, the bldg is 400sqft!

When we bought it the taxes increased but we bought it for less than the value they are stating that it is worth does that make sense if the market value when we bought was what we basically paid for it back in September.
I am filing an abatement next year, I missed this years chance
We knew the taxes were high going into it so it was no surprise but still hurts

Is the problem property taxes or is it town spending?
 

As usual a very interesting discussion

1. Register to Vote
   If you want to control property taxes, each of you should consider registering to vote in your lake side town. There are few rules, prehaps none, as to residency time you need to register to vote in a NH town and absentee ballots are available in some towns.
2. People are not losing their "family homes" but cashing out big time on appreciated realestate
   Several of my neighbors, who had old cottage property on the lake (assessed at 230K) sold this spring for almost 700K. They took the money and bought homes in non lake front communities and pocketed much of the appreciated value tax free (federal cap gains rules on homes allow 500K tax fee)
3. A vast majority of the taxes are paid by non residents and non consumers of town services
   I have heard of numbers as high as 80% of some towns tax revenue comes from non resident - non users of services. I wonder if you were a stock holder in a company, and owned 80% of the shares, if you would allow the 20% owners to run the company?
   
   And so we are back to number 1, which is the only way the current tax situation will change.:rolleye2:

I suppose this depends on what you define as a "family home". Our property has been in the family since the 1800's. So, we may not live there year round, but our collective family history makes it feel like a family home to me.

Vroom, great post; very informative, as they all have.

The only part I look at differently is that these people (that sold) would rather have stayed if they had the financial means. That had to be tough.

Whenever I'm there and you just sit and look out across the lake..........................oooohhhhh man, how nice and relaxing is that!

Maybe I can get a job working for Konahchick, she's having trouble with help. Do the servant's quarters have a water view Konahchick? :laugh:

NH Income Tax
 

Can you people PLEASE stop saying that there is no income tax in NH. In fact, for interest, dividends, and annuity payments (i.e., folks with fixed incomes) the 5% NH tax is one of the highest in the nation.

My two cents
 

I live in Jersey - taxes here are hellish.

However, given that a great number of the NH are retired (as we hope to be one day), the property tax really is a burden. Since there is no traditional income tax and seniors have a fixed income rather than an earned income, I would think seniors in NH must bear a greater burden than seniors in other states.

Does this make sense?

nj2nh

Are property taxes in Mass cheap? How about New Jersey or New York? Florida? Where can you have the quality of life that we have here for much cheaper? NH may seem high but where isn't it? Second or vacation homes are owned 12 months a year even if only used 2 months a year. If that waterfront cottage your grandfather built for 20K isn't worth a 600K tax base than sell it and pocket the money. But if you can afford it and it's worth the sacrifice than continue to love and enjoy it for years to come. And if you want a voice in policy move on up and vote.

To help clarify because Proposition 2 ½ is commonly misunderstood. Proposition 2 ½ limits the municipality from raising the overall tax levy by more than 2 ½ percent a year, meaning taxes can only be raised by 2 ½ percent a year based on the full cash value of all taxable property in the city or town unless voters approve an override for a specific project.

It doesn’t keep an individual homeowner’s property tax from raising more than 2 ½ percent a year.

You are absolutely correct!

If you are old enough to remember, it was a citizen’s initiative petition that was approved by voters that was brought about the law.

Politicians in Mass didn't advocate for it and any politician that suggests doing away with it knows he/she would be a former state rep or senator at the next election.

T.H.E. You forgot to mention business profits tax and business enterprise tax. No tax on workers, but on owners and professionals.

ITD has it...
 

Folks need to plan for the costs. It shouldn't come as a surprise to anyone that waterfront property is valued higher and comes with a higher tax bill. Same with your more expensive cars, or boats, or whatever.

Are property taxes high? Yes, they are (relative to other states). But the overall tax burden in NH is still lower. And I'd rather be paying higher town property taxes over which I can exert some influence in the voting both or town meeting each year rather than translating it into sales or income taxes which, once implemented at the State level, are virtually impossible to influence.

I had to laugh at the fallout from the Massachusetts "Tax Holiday" a weekend or two ago, and the State's complaint about how much money they lost. They lost? Who's money is it? ;)

Sometimes it's Home...
 

Some have decades of protecting the shoreline, wholesale removal of poison ivy, nurturing the woods, and warmly consider it "Home". (Especially when it is warm :emb: ).

I have many running board-feet of lumber that I've personally installed, and a decent forest of marketable white pine trees that I planted.

(Planted before the movie "Silent Running", with crazy-guy actor Bruce Dern. Hmmm...crazy-guy...oops!...). :emb:

Anyway, when one has "sweat-equity" in one's home, selling to pocket the money isn't an easy option—even as the McMansions encroach.

KJ, you make good points but I don't agree with this one..........

"Folks need to plan for the costs."

Now maybe I'm wrong but I don't think that people that purchased a lakeside "cabin" "10" or 50 or 100 years ago could have imagined the values (or the taxes) to go up the way they did over the past few years.

I think that there is a difference between the people that purchase now and the ones that did years ago. People that purchase now realize the tax burden that comes with it.

That would also explain the type of homes being built now as opposed to the "cabins" once built.

Thank you all for your posts, it has been enlightening.

Dana

The California solution
 

Hi Captain Zipper-

Thirty years ago California dealt with the problem that you are concerned about. During the 70's there was rapid appreciation of property values. Property taxes were going up so fast that people (especially the elderly) were forced to sell. We bought our house in 1974 for 51K. By 1979 our property taxes were scheduled to go up to $2,000 per year.

At this time, a man named Howard Jarvis got the population to rise up and vote to pass Proposition 13 that changed the State's constitution. It's effect was to reverse the property taxes to 1975 values and allow them to be raised by only 2% per year as long as you owned the property. If you sold the property, then the tax rate would be !% of the sales price for the new owner. Property owners would thus know what their taxes would be for years in advance.

The results have been dramatic. Homeowners have elected to live in their homes for decades rather than move more frequently. Rules are that you can rebuild your house without affecting the tax rate if you leave part of the original house standing. This has spawned a huge remodeling industry as homeowners elect to remodel rather than move. As a result, neighborhoods that have run down over the years have been rebuilt one house at a time. This has lifted the value of the entire area with pride of ownership on display.

Consider the alternative. If prop 13 hadn't been passed, run-a-way property taxes would have caused properties to fall into decay.

Sure California has a wide variety of other taxes (income, sales, etc), but I don't mind paying those, because if Prop13 hadn't passed I would be paying about $20,000 per year (assuming that I could still afford to own my home), whereas the property tax bill for my house this past year was $987. I can assure you that my income and sales taxes don't come anywhere near $20,000.

So this is the problem across the country with states that fund their government primarily with property tax. The choice is yours. You can leave the status quo, or you can protect your future and do something about it.

Dick B.

Dick,

Thanks so much for your post. Definitely a different approach; you hit the nail on the head with the type of solution I was wondering about in my initial post.

It shall be interesting to see the rubuttles.

I think I'll Google it for more info.

Do you mind if I ask what the value of your CA. house is now? You don't have to answer if you don't want to.

I am wondering how much some of the lake towns have increased their revenue from the dramatic rise in home values over the past 10 to 20 years.

Dana

My house value
 

Hi Dana-

Home appreciation in California over the past thirty years has been beyond amazing. Although we paid $51,000 for our house in 1974, it is worth about one million now. Of course, as I wrote in my previous post, we could have never afforded to keep it had the tax system not changed.

The same thing may happen to lake front property in NH. Maybe you can afford to pay the taxes now, but unless something changes, the future may find that only the rich will be able to afford to live on the lake's edge.

Best regards,
Dick B.

Dick, I feel that the tide of change is already taking place at Winni. Over the last decade or more the cabins are going and the mcmansions are coming.

In talking to owners of smaller waterfront homes they are getting forced out, they can't afford the taxes. "Yes", they do get a good price for their home but they are forced out because they can't afford to keep it.

I wish I had your property tax payment on my home, let alone the value for it that you have. :eek:

Do you own a home on Winni? (Heck of a commute.)

Dana

There are a few comments above about people not being able to afford to keep their homes due to the escalation in property taxes. I am not an expert on this, but wouldn't the following be a solution to this problem?

Let's say someone bought a lakefront home for $100,000 many years ago and it has now appreciated to be worth $1,000,000 and is completely paid for. For argument's sake, let's say their taxes increased from $1,000/yr to $10,000/yr and that the homeowner does not have sufficient cash flow to afford $10,000 taxes in a year.

Couldn't the homeowner get a home equity loan or home equity line of credit (using their home equity as collateral) and use the proceeds to pay the taxes? For example, let's say they got a $200,000 home equity loan. They would then have to make payments of about $14,000/yr on the loan at 7% interest plus another $10,000/yr in property taxes for a total annual payment of $24,000. So, the $200,000 loan would cover at least 8 years of taxes/interest. In those 8 years, the home would likely have appreciated by at least another $200,000 so the homeowner would still have $1 million in home equity (and could borrow more if necessary to meet future tax obligations). This is just a way of turning a non-liquid asset into a liquid asset. I'm not a banker or accountant though, so let me know if my logic is faulty.

Dana-

No, I don't own anything at the lake right now. I was born and raised in New Jersey. My folks had a cabin on the beach in Lake Shore Park. I spent all my summers there until I was in my mid twenties, then moved to Southern CAl in 1965. But, I have lots of relatives in the Gilford and Alton areas. I get back there every few years, so I see what is going on around the lake. I can tell you that what is happening there is exactly what we went throught out here thirty years ago.

Property taxes out here are no longer an issue. But we've got a lot of other problems instead.

Regards,
Dick

Long Pine: I hear what your saying and I suppose it MAY work, my only thought is if someone could not afford the taxes how will they swing the added expense of now borrowing even more? I do understand the theory of stretching out the payments longer though. That's how people get into trouble, can't afford a $2,000 item so they whip out the plastic. Then guess what? A month later the bill comes in any way and they mail in $100.00 a month at around 18% interest!:( That's the exact same reason the stock market had a "correction" of late - credit worries.:eek:

Wow
 

I do not want to start a fight here, you should not have to take out a loan just for taxes, that is crazy. When that comes to a discussion you know the government has gone too far on the taxes, Just because say I, not saying me, bought a place years ago and it appriciated to my benefit, why should the government get more for what I was able to accomplish. Yes I understand raise taxes to run the infastructure of the community, city or town or what ever, but it is getting out of hand these tax rates are.

Seems lots of towns with lake front property think they have an endless well of cash to spend. Take Moultonboro for example. Anything anyone wants in town goes thru. New Muncipal building, followed by new Public Safety building, followed by a new Library, the next thing will be a new highway garage, followed by more and more and more...

Government needs to scale BACK.. too many programs. Give the taxpayers a break. What all these property taxes will bring is the errant thought that if we had broad based taxes (such as income or sales), the property taxes would go away.... Think again. Ever see taxes disappear? sure they may go down for a year, but then they somehow spring right back...

/takes deep breath....
/ducks

New highway garage in Moultonbourgh was built about 6 years ago on Rt 109.

That was the STATE highway garage, the town wants a new one to replace the TOWN garage on Playground Dr.

Property tax is based on the value of the taxed property.

Waterfront is taxed heavily because it is much more valuable, generally speaking, than non-waterfront.

So long as NH has no income or sales tax, property will be heavily taxed.

To your credit, NH politicians are pretty tight fisted (relatively speaking) and do not spend a lot of tax dollars on "liberal" social programs, as this reflects the conservative attitude prevalent in New Hampshire.

But government provides services which are not cheap; the money has to come from somewhere, and that "somewhere" is (currently) property taxes.

Personally, I think your state's taxation method is quaint and out of touch with the times, but oh well, I don't live there: although my family pays taxes for waterfront property.

Sure, we complain, and moan, but in the end it gets paid: it's the law.

Pay or sell, or change the law.

It really is that simple.

Tax caps.

If I get a yearly COLA raise of say, 3.5% for arguments sake, thats all I get. If I wanted 5% because I just "need" a new car (fire truck), shed (city garage) or house (school), too bad. Why is it the local governments don't get held to the same standard? I may not be a big fan of the city of Laconia or Franklin where I'm originally from, but the tax cap is a big reason to stay in those places. Keeps the burden realistic.

In regards to the loan idea....It sounds good in theory, but shaky loan practices are what got us into this whole real estate crumble. What we have been forced to do is sell off small lots over the years to maintain the cabin and pay taxes. Many people on the board want to rant about condos going up everywhere, but please remember that some of the people on the lake still are 'little guys' who do what they have to in order to maintain a piece of family history.

I do not have information on orginal purchase price, but do have a deed from the 1880's where a family member purchased our current property from the estate of another family member for around $400. I highly doubt they foresaw and could adequetly plan for what the value is now.

Also, in the late 1800's my family owned a huge swath (like half the island) of bear island...which was supposdly won in a poker match, :eek:. The family member then turned around and sold during the same time period for a few hundred dollars! Can only image what that amount of property would fetch now!