Taxes

[TomC]

A lot of people dream of retiring here, so they can enjoy the place that for many years, in some cases, was just a weekend/vacation place. With retirement comes living off fixed income whether from pensions, annuities, or the "4% rule" drawing from a portfolio... ever-increasing taxes will drive a number of these folks away. Seems a shame...

[Biggd]

Originally Posted by TomC

A lot of people dream of retiring here, so they can enjoy the place that for many years, in some cases, was just a weekend/vacation place. With retirement comes living off fixed income whether from pensions, annuities, or the "4% rule" drawing from a portfolio... ever-increasing taxes will drive a number of these folks away. Seems a shame...

That's what I'm faced with, retired with two homes, one in Ma and one in NH. My wife doesn't want to live in NH full time and at some point I may need to sell one, it would most likely be the lake house. If it was just up to me the decision would be an easy one, I would retire at the lake.

[tummyman]

It is human nature to complain about taxes, but there is a solution. People need to get involved in what is happening in their town. Get on the Advisory Budget Committee or run for an office, etc. etc. In M'boro, schools are spending huge amounts of money and just ignoring taxpayers. Just recently 8 people announced retirement and even with low enrollment, the school board has decided to hire replacements...another stick in taxpayers eyes. One of the retirees was a principal. Why do they need three principals and a Supt. of less than 500 students? Dumb.... There is no accountability. Watch the school meetings on-line.....but see that only one or two residents show up and ask questions. Same for Select Board. There are lots of very smart people around, but most just pay their tax bills and grumble. Get off your butt and get involved...or just suck it in and pay. Up to you.....

[John Mercier]

If they aren't residing here, and only spending a couple of months...
Not really that easy to ''get involved''.

[feb]

I think one problem with the "at what point will towns wake up and start being frugal" thought is that it isn't as strong because for every one of us trying to keep a grip on our dream there are 100 people in line waiting for us, with cash, to lose that grip and decide to sell to them. Towns don't care who pays as long as they pay.

[thinkxingu]

Originally Posted by feb

I think one problem with the "at what point will towns wake up and start being frugal" thought is that it isn't as strong because for every one of us trying to keep a grip on our dream there are 100 people in line waiting for us, with cash, to lose that grip and decide to sell to them. Towns don't care who pays as long as they pay.

Without going too far off-topic, this is the problem with many things.

I remember people complaining about the exponential rise in ticket prices for the Bank NH Pavilion when ticket companies took over—a few years later, and there are still enough people paying those prices for it not to be an issue.

I'll add that the current state of consumer debt in America might indicate that not only are people willing to overspend on things, but that they're willing to finance that overspending.

Sent from my SM-S911U using Tapatalk

[Biggd]

Originally Posted by feb

I think one problem with the "at what point will towns wake up and start being frugal" thought is that it isn't as strong because for every one of us trying to keep a grip on our dream there are 100 people in line waiting for us, with cash, to lose that grip and decide to sell to them. Towns don't care who pays as long as they pay.

We haven't really had a recession in over 15 years, other than the first 6 months of the pandemic and then prices took off. That's the only thing that really resets the economy and causes prices to decline. Prices on everything have gone up substantially and people are still working off that sub 3% borrowed money. At some point the consumer will balk at the increases and pull back. I don't think things can keep going up at this rate much longer without a pull back.

[TomC]

Originally Posted by Biggd

At some point the consumer will balk at the increases and pull back.

that's already happening with cars... manufacturers drove the average transaction price for a car to $50K... they are sitting on lots now. I heard a commercial on the radio for a car dealer in Maine who was offering $12k below invoice (not MSRP) on some Jeeps and Ram trucks...

[John Mercier]

Originally Posted by Biggd

We haven't really had a recession in over 15 years, other than the first 6 months of the pandemic and then prices took off. That's the only thing that really resets the economy and causes prices to decline. Prices on everything have gone up substantially and people are still working off that sub 3% borrowed money. At some point the consumer will balk at the increases and pull back. I don't think things can keep going up at this rate much longer without a pull back.

Maybe.
But lakefront/access property in central NH is a finite supply.

So it doesn't take a whole lot of demand to keep those prices rising.

[FlyingScot]

Originally Posted by John Mercier

Maybe.
But lakefront/access property in central NH is a finite supply.

So it doesn't take a whole lot of demand to keep those prices rising.

Exactly. With median prices >$2MM, nobody's borrowing to be on the water. It's all capital gains from a very hot stock market. Look for a cut in taxes on the wealthy to boost lake prices higher, or a drop in the S&P to bring them lower

[Biggd]

Originally Posted by FlyingScot

Exactly. With median prices >$2MM, nobody's borrowing to be on the water. It's all capital gains from a very hot stock market. Look for a cut in taxes on the wealthy to boost lake prices higher, or a drop in the S&P to bring them lower

Many of those very wealthy refinanced their business debt and when their businesses make more, they also make more. I'm sure Trump renegotiated all the loans on his real estate empire at very low rates as did many other commercial and income producing property owners did. But the stock market has also contributed to all this wealth. I think 2025 will be a make or break year, hope for the best but prepare for the worst.
I know I'm holding off on any big expenditures for at least the first six months to see which way it goes but I'm 70 and not your typical consumer anymore.

[Biggd]

Originally Posted by John Mercier

Maybe.
But lakefront/access property in central NH is a finite supply.

So it doesn't take a whole lot of demand to keep those prices rising.

That doesn't keep people from looking elsewhere, like Maine. The very wealthy will own all the NH lakefront, and the rest will look to Maine, where there is a much larger supply.

[secondcurve]

Originally Posted by Biggd

We haven't really had a recession in over 15 years, other than the first 6 months of the pandemic and then prices took off. That's the only thing that really resets the economy and causes prices to decline. Prices on everything have gone up substantially and people are still working off that sub 3% borrowed money. At some point the consumer will balk at the increases and pull back. I don't think things can keep going up at this rate much longer without a pull back.

The recession during the pandemic was actually just two months! Length of the recession aside, your point is well taken. I’m not wishing for a recession but when one hits many things will be reset as there is a lot of leverage in the economy.

[jeffk]

The actual tax you pay is a complicated matter with multiple moving parts.

Your assessment is based on your properties value as COMPARED TO OTHERS IN THE TOWN. The net value of the property can go up, or down. The desirability of YOUR property can go up or down as measured by similar properties that have sold recently. This evaluation is not an exact science. A sale (or a couple) driven by someone willing to pay a premium for getting what they want can ripple through all other similar houses. Limited availability of properties can drive up competition and prices. The overall economy can limit or explode what people are willing to pay for property. The real issue is if YOUR property stands out to gain, or lose, from the factors that are driving the prices. There could be a general increase in prices but your house is in a desirable town and houses there similar to yours are being bid up. Your house valuation goes up with THEIR sales. You have a more valuable house and get the taxes that go along with that. When the town's percent change in valuation is announced, you can compare YOUR percent change in valuation and estimate that your taxes are going up or down and, generally, how big the change will be.

Then there is the town's budget. Again there can be many factors in play. There can be special considerations for THIS year that drives taxes up. Frankly, it seems that most budgets of towns around the lake are not exploding. Maybe they have been have been comparatively higher for a long time but they don't tend to make great leaps upward unless there are justifiable costs. YES, I know people can quote exceptions. However, if you live in a town that has had high taxes for the last 20 years, do you think that is going to change?

The tax RATE is set by the overall town valuation and the town's budget.

All the above has to play out before you get your tax bill. Every time new valuations get sent out, people panic because they have, usually, gone up. You need to take into account overall town valuation and the town budget. Then you have to wait for your actual tax bill.

I'm not saying it won't be bad news but until you get it, you can't be sure what it will be. As information is released prior to the bills coming out, you may estimate but ALL the information needs to be compared.

[TheProfessor]

Originally Posted by Biggd

We haven't really had a recession in over 15 years,

From Google:

"According to available data, since 1789, the average number of years between recessions in the United States is roughly 5-6 years"

That is the average in years.

[Biggd]

Originally Posted by TheProfessor

From Google:

"According to available data, since 1789, the average number of years between recessions in the United States is roughly 5-6 years"

That is the average in years.

Long overdue, "caution" is the theme for 2025.

[map]

Originally Posted by John Mercier

If they aren't residing here, and only spending a couple of months...
Not really that easy to ''get involved''.

This is just an excuse. As someone who lives full time (retired) in an HOA community that has more than half second home owners I can tell you these people don't even take the time to zoom in on an HOA meeting or vote on the budget on line which takes like a quick minute to do! And they don't read the HOA emails to keep up to date with things they need to know. Baffling to me.

If they truly cared about what is going on here locally there is a lot they can do. Read the local news. Write letters to the editor, the city/town councilmen, etc. Maybe come up a few days before the weekend to attend a meeting and speak up once in a while.

Where there's a will, there's a way if you truly care about issues....if not, don't complain.

Having a home or "just a house to play in" is still a responsibility, whether you have one or two or three or ten homes...

[John Mercier]

HOA works under a property right.
Municipalities work under a residency requirement.

[map]

Originally Posted by John Mercier

HOA works under a property right.
Municipalities work under a residency requirement.

As I already mentioned there’s still a lot a second homeowner can do.

[TiltonBB]

Originally Posted by map

As I already mentioned there’s still a lot a second homeowner can do.

My other home is in a 670 door gated neighborhood with an HOA. There are a lot of policy and rules issues that homeowners can vote on. There are many committees for safety, activities, amenities, rules, property appearance changes, and other issues that people can serve on. It seems the same small group of people get involved, some serve on multiple committees. Others just complain but don't get involved. I fly down to meetings for a committee I am on several times over the summer.

It was the same growing up in a small New England town. A few people get involved, others couldn't tell you anything about the town management. They just care what day their rubbish gets picked up and if their street gets plowed.

[Major]

Some of us still work and have busy lives so the last thing we want to do is get involved with HOAs. Thank goodness we have people who volunteer. Yes, we have had our fair share of former captains of industry wanting to recapture the glory of a past life, but for the most part they are very nice people wanting to help.

We had a situation this weekend in which mailboxes were vandalized. Our association president took the time on Saturday to canvass the neighborhood to see if anyone had a video showing the damage. Unfortunately, our camera didn't show anything.

[map]

Originally Posted by TiltonBB

My other home is in a 670 door gated neighborhood with an HOA. There are a lot of policy and rules issues that homeowners can vote on. There are many committees for safety, activities, amenities, rules, property appearance changes, and other issues that people can serve on. It seems the same small group of people get involved, some serve on multiple committees. Others just complain but don't get involved. I fly down to meetings for a committee I am on several times over the summer.

It was the same growing up in a small New England town. A few people get involved, others couldn't tell you anything about the town management. They just care what day their rubbish gets picked up and if their street gets plowed.

Yes. Right.

But my point is - regarding taxes- second homeowners pay them also so they have a lot of skin in the game and though they can’t vote they certainly can write letters, go to a town or city meeting once in a while and speak up, contact a state representative, etc.

[TheProfessor]

Originally Posted by map

an HOA community that has more than half second home owners I can tell you these people don't even take the time to zoom in on an HOA meeting or vote on the budget

Am tired of Zoom meetings. Covid is mostly over now. Let's get back to real people meetings. To see board members face to face. In person.

But. People don't get connected to the HOA either Zoom or in person.

It is up to the board to figure out ways to get more people to get involved.

[map]

Originally Posted by TheProfessor

Am tired of Zoom meetings. Covid is mostly over now. Let's get back to real people meetings. To see board members face to face. In person.

But. People don't get connected to the HOA either Zoom or in person.

It is up to the board to figure out ways to get more people to get involved.

Our board does all meetings in person. They just make Zoom
Available for those that can’t or don’t want to come in person. Believe it or not some people who are in the community at the time of the meeting will Zoom in rather than walk up to the meeting! I kid you not!