Property taxes account for 59.5% of New Hampshire’s combined state and local tax revenue, according to figures cited by 247 Wall St. The state does not tax wages or salaries, has no broad sales tax and repealed its tax on interest and dividends effective Jan. 1, 2025.
The tax structure leaves municipalities and school districts dependent on property assessments and local rates. The New Hampshire Fiscal Policy Institute has reported that nearly two of every three dollars used for public schools comes from local property taxes.
How the tax structure compares
New Hampshire also has no estate or inheritance tax. Retirement income, including IRA withdrawals, pensions, dividends and Social Security, is not subject to a state income tax under the structure described by 247 Wall St. The Tax Foundation estimates that property taxes make up most of the state’s combined state and local tax collections and puts the effective rate on owner-occupied homes at 1.50% of value.
- New Hampshire does not tax wages or salaries.
- The state has no broad sales tax.
- The interest and dividends tax ended Jan. 1, 2025.
Massachusetts uses a different mix of taxes, including a 5.00% flat income tax, a 6.25% sales tax and an effective property-tax rate of 1.00%, according to the comparison cited in the analysis. Massachusetts does not tax Social Security benefits at the state level, according to a summary from a Massachusetts accounting firm cited by 247 Wall St.
Values and local rates
Property-tax bills are based on a property’s assessed value and the local rate. Rates differ substantially among New Hampshire municipalities. The analysis cited rates below $6 per $1,000 of assessed value in some communities and rates above $27 per $1,000 in others.
Home values have also increased in parts of the state. Over five years, the federal home price index rose 52.37% in the Manchester-Nashua area and 53.51% in the Rockingham-Strafford area. Assessments can reflect rising property values over time, although the timing and amount of changes are determined through local assessment processes.
The tax differences are part of why some people moving from Massachusetts and New York consider New Hampshire. IRS migration data for 2022 to 2023 showed Massachusetts as the largest source of people moving into New Hampshire, with 10,603 tax returns associated with the move. The figures describe tax-return movement, not a count of individual residents.
