Navigating New Hampshire's Unique Tax Landscape: A Guide to Tax Bills and Prorations




 Introduction:

As we embrace the arrival of December, not only does the holiday season beckon, but so do New Hampshire's tax bills. It's that time of the year again, and in the Granite State, we like to infuse a touch of excitement into our tax season, making it a tad confusing for sellers and buyers alike. In this blog post, we aim to demystify the intricacies of New Hampshire's tax periods and prorations, shedding light on a subject that often causes confusion at the closing table.

Understanding Tax Periods in the Granite State:

In New Hampshire, property taxes follow a semi-annual schedule in most areas, with a few exceptions like Concord, New London, and Claremont, where they are billed quarterly. For the majority, the semi-annual tax bills are issued in July and December. Let's break down how these bills work:

  1. Six-Month Coverage:
    • Each bill covers a six-month period, encompassing three months in arrears and three months in advance.
    • With the December tax bill (and July), property owners are not only settling their current tax obligations but also covering the upcoming three months.



Prorating Taxes at Closing:

The process of prorating property taxes at the time of real estate closing is crucial for both sellers and buyers. The approach to proration depends on the timing of the closing and the party responsible for settling the tax bill.

  1. Dependence on Closing Timing:

    • Proration is contingent upon whether the real estate closing occurs before or after the issuance of the tax bill.

  2. Seller-Oriented Proration:

    • If the seller is responsible for settling the bill, either because the billing is in their name or they have already made the payment, the proration process involves the buyer reimbursing the seller for the portion of the billing period during which they (buyer) owns the property.

  3. Buyer-Oriented Proration:

    • Conversely, if the buyer is handling the bill, the proration shifts to the seller reimbursing the buyer for the period during which they paid taxes but the seller still maintained ownership of the property.

Conclusion:

Navigating New Hampshire's unique tax landscape, especially during December, requires a clear understanding of tax periods and prorations. Whether you're a buyer or a seller, knowing the ins and outs of the semi-annual tax bills and the proration process at closing is essential for a smooth real estate transaction. If you have any questions or need clarification on your specific situation, don't hesitate to reach out. Our goal at Broker’s Title is to make the closing process as seamless as possible for you.

info@brokerstitlenh.com | www.brokerstitlenh.com | 603-434-1414

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