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How To Determine If You Are A Candidate For a Refund

To find out if you are a candidate for a real estate tax refund, compare the fair market value of your real estate as of April 1, 2023 against the municipality’s “equalized” assessed value.

Determine the Fair Market Value of Your Real Estate

The best way to do this is with an appraisal. Second best is a broker opinion of value. If you recently purchased your property in an arms-length transaction, use the purchase price.

If you simply are looking for a rough idea, try one of the many free, online estimators.

The valuation date must be April 1, 2023. If you believe your property has increased or decreased in value since April 1, 2023, you need to roll back the clock to determine its value as of April 1.

Apply the Equalization Ratio

It may surprise you to learn the value on your tax bill likely is not the municipality’s estimate of fair market value. To equate the value on tax bill (the “assessed value”) to fair market value, you need to divide the value on your tax bill by the equalization ratio. Doing so yields the “equalized assessed value.”

Municipalities must revalue all properties every five years, and the equalization ratio is designed to reflect changes in the market during the intervening years.

The tax refund process has a major flaw: you will not know the equalization ratio applicable to your 2023 taxes until after the March 1, 2023 deadline to request a refund; therefore, use the 2021 ratio. When in doubt, file an abatement application. You always can withdraw it when the 2021 ratio becomes known, usually around May.

Check your municipality’s website for the 2021 ratio, and then again in the spring for the 2022 ratio.

Use this formula to determine what the municipality considers to be the fair market value of your property, or, equalized assessed value:

Assessed value (from your final tax bill) / Equalization ratio (stated as a decimal*)

* equalization ratios often are stated as a percentage. If the ratio is 103.4%, use 1.034. If the ratio is 97.8%, use .978.

The resulting value is called the “equalized assessed value,” and equates to what the municipality considers to be the fair market value of your property.

If your municipality conducted a revaluation in 2022, the ratio should be right around 100%, so use 1.0

Calculating Your Potential Tax Refund

To determine the amount of your potential refund, subtract your calculation of fair market value from the equalized assessed value, and multiply the difference by the tax rate.

The "Close Enough is Good Enough" Rule

Following the lead of the board of tax and land appeals, many municipalities take the position if your property’s actual value is within 10% of your equalized assessed value, you lose. Close enough is good enough.

We at RETaxRefund believe this approach violates the New Hampshire Constitution, but until it is challenged successfully, you will need to live with it.

Some Useful Links:

A Final Note – Comparable Properties

You have the burden of proving your value is correct and the municipality’s is not. To help meet that burden, you should provide information on other properties comparable to yours you believe support your value.

Good Luck!