New Hampshire continues to depend heavily on property taxes to finance local government services, with significant variations in tax burdens observed from town to town, according to a recent analysis by the New Hampshire Fiscal Policy Institute. The study highlights stark disparities in annual property tax bills for homeowners, even among neighboring communities.

For instance, a homeowner with a $500,000 property in Nottingham would pay roughly $6,600 annually in property taxes, while a homeowner with an identically valued home in nearby Lee faces a bill exceeding $13,800. Across the state, property tax bills for a $500,000 home range widely, from as low as $1,310 to as high as $18,270, underscoring the uneven tax landscape in New Hampshire’s cities and towns.

The analysis attributes these disparities partly to differences in local government spending and the size of each community’s taxable property base. Nottingham’s equalized property valuation per capita stood at $253,500 in 2024, compared with $224,200 in Lee. Other municipalities show even broader ranges, with per capita valuations as low as $113,300 in Berlin and as high as $1.6 million in New Castle. Communities with larger property tax bases often maintain lower tax rates, as the fiscal burden is distributed across more taxable assets.

State policies also play a role in these differences. New Hampshire local governments rely on property taxes for about 61 percent of their revenue, the highest rate of dependence among all U.S. states for fiscal year 2022. This reliance stems from the limited authority municipalities have to levy taxes beyond property taxes and the relatively modest levels of state funding available for local governments compared to other states.

Phil Sletten, research director at the institute, noted that due to constrained state aid and substantial local funding needs, property taxes carry a disproportionate share of responsibility for financing public services. Over the past decade, inflation-adjusted funding from the state to local governments has increased by approximately 12.1 percent, but this has not significantly lessened municipalities’ dependence on property taxes.

The impact of this system is particularly pronounced for lower- and moderate-income residents. New Hampshire households paid an average of $3,388 per person in property taxes in 2022, the second-highest level nationally. Furthermore, property taxes consume a larger portion of income for low-income residents—nearly 6 percent—compared to around 2 percent for the highest earners, indicating a regressive effect.

Sletten emphasized that property taxes in New Hampshire represent a substantial and growing component of public service funding, placing a heavier financial burden on lower-income households. The wide variation in tax bills and rates across towns continues to shape the fiscal experiences of Granite Staters as they fund local government services primarily through property taxation.