The Cost of Living and How It All Evens Out
One of the most important things potential home buyers consider before purchasing a home is the cost of living associated with owning the home. More specifically, how much are the property taxes? In a lot of cases, property taxes and insurance will be estimated and collected by the financial institution that lends the money for the mortgage. Under those circumstances your mortgage payments may fluctuate depending on how much the property taxes and insurance rise or fall. In my experience, the fall is a rare occurrence, especially these days!
As someone who was born and raised in Massachusetts, I’m pretty familiar with the wide range of taxes that can be imposed by state and local governments. After living in Massachusetts most of my life, I finally decided to move to New Hampshire where there is no sales or income tax. I was attracted by what they like to refer to in the Granite State as “The New Hampshire Advantage.” When I made the move to New Hampshire, it was indeed a clear win since I didn’t have to pay state income taxes any longer. I didn’t miss the sales tax much either, but that only seemed to bite hard when a major purchase was made. Yeah, it was probably a psychological thing, but that’s the way those crafty politicians like it.
New Hampshire had a long-standing reputation as a state with high property taxes but when I made the move there, they weren’t high enough to scare me away. Take it from me: That is changing. Fast.
I recently left New Hampshire for what I consider greener pastures. I’m living in the southeast U.S. now and even though we have both a sales and income tax here, I think I’m still coming out ahead or maybe even at worst compared with our tax burden in New Hampshire. Although the politicians in New Hampshire love to brag about the aforementioned “advantage” and make noise about “taking the pledge” to never impose a sales or income tax in the state, they are making up for it with sky-high property taxes.
Compared with a place like Massachusetts, I’d still consider New Hampshire a winner when it comes to taxes since I still have family in Massachusetts and I know how they are beginning to catch up with New Hampshire with regard to property taxes. Politicians in states like Massachusetts want it all and there is literally no end to their greed.
As I mentioned, the state I live in now does indeed have both a sales tax and an income tax, but their property taxes are dramatically lower compared to New Hampshire. Let me give you a real-world example. The yearly property tax burden for our home in New Hampshire was about $5,000. I happened to talk to a fellow from Hudson, NH not long before we left and he was paying $7,000 a year for a house that was smaller than ours and had a much smaller yard! That’s some “advantage” there!
The house we are living now checks in at about $600 a year for property taxes. No, for those if you in the northeast, that is not a typo – I did indeed intend to say six hundred dollars! That means we were paying nearly ten times as much for property taxes in New Hampshire than here. The “New Hampshire Advantage” is starting to look a little frayed around the edges from where I’m sitting. Perhaps I might go as far as saying coming apart at the seams!
Although not real estate-related, I was also pleasantly surprised to discover that our auto insurance bill was cut almost in half after we moved here. Maybe that has something to do with the lack of snowy, slippery roads around here during the winter months, but that’s just a guess.
Like I said, despite the fact that this state has more types of taxes that they hit you with, I believe we are still coming out ahead considering the ridiculously high property taxes in New Hampshire. I guess it’s kind of like some kind of magic show they are running up there. Sure, they’re not taking money out of all of your pockets but they sure do take a serious wad of cash from that one pocket they slip their hand into and it seems like the amount they take keeps going up every year.
There is still a lot about New Hampshire that’s desirable, in general there is more freedom where laws concerning individual liberty come into play and I guess those are the things I’ll miss most about living there. The “New Hampshire Advantage” is not all its cracked up to be where taxation is concerned, but the upside is that living there still beats living in a place like Massachusetts. If it was not for the long, cold, snowy winters combined with rising property taxes we probably wouldn’t have left. There are a few things I miss about New Hampshire and an equal number of things I will not.