’26 Article 33 – Proposed Increase in Qualifying Income for Elderly Property Tax Exemption

To see if the Town will amend the Elderly (Property Tax) Exemption program of RSA 72:39-a as previously adopted in the Town of Hampton, based on assessed value for qualified taxpayers, to be  as follows: for a person 65 years of age up to 75 years, $175,000; for a person 75 years of age up to 80 years, $225,000; for a person 80 years of age or older, $300,000.  To qualify, the person must have been a New Hampshire resident for at least 3 consecutive years, own the real estate individually or jointly, or if the real estate is owned by such person’s spouse, they must have been married to each other for at least 5 consecutive years.  In addition, the taxpayer must have a net income of not more than $50,000, or if married, a combined net income of not more than $90,000; and own net assets not in excess of $250,000, excluding the value of the person’s residence.  The purpose of this article is to change only the net income thresholds to qualify.  Should this article not pass, the net income amounts for the Town’s elderly exemption from property tax shall remain as previously established.

What it Means: : In Hampton (as in many towns), we have real estate tax exemptions that are granted to lower-income older residents to assist with their tax burden, to allow them to remain in their homes. The way it works is the amounts referenced in the chart below are taken off the assessed value of the home prior to calculating the taxes for that property. There are net income and net asset limitations, since the program is meant to help those in need. Currently, older taxpayers can earn no more than $42,000 for one person or $75,000 for a married couple in order to qualify for this exemption.  The exemption deducts between $175,000 to $300,000 (depending on age) from the property valuation before taxes are calculated. If this Article passes, single qualifying homeowners would be able to earn up to $50,000 per year and a married couple could bring in up to $90,000 a year.  That increase is roughly 20% higher than the previous qualifying income limit.

Those in favor say: The income limit to qualify for the Elderly Property Tax Exemption has only been increased once in 25 years for 15%, during a span of time during which inflation has gone up 75%.  This Article will help prevent older taxpayers from having to sell their homes if they can’t keep up with the rate of increases on property taxes.

Those opposed say: The population group of 65+ is going to double by some estimates in the next 20 years.  The more exemptions that we allow, the more the tax burden shifts to younger people who are also just trying to make ends meet.  The income level was just increased via Article 29 in 2024.  At that time, the income qualification for a single taxpayer was raised from $38,000 to $42,000 (10% increase) and for married taxpayers, it increased from $58,000 to $75,000 (29% increase). The increases proposed this year would be on top of the 2024 increase.

Fiscal Impact:  A speaker at Deliberative Session stated that only 3 additional Elderly Exemption applications were received at Town Hall after the 2024 increase, however it is not known how many taxpayers will apply for the exemption with the new increases in place.  For fiscal perspective, in 2022, all exemptions reduced the Town’s taxable valuation by roughly $30 Million, of which the elderly exemption represents about 90%. This was equivalent to about $430,000 (in 2022) in tax expense that was redistributed to other taxpayers.  Not knowing the precise impact of inflation or the impact of increased applications, if we roughly say $500,000 in redistributed tax requirement (for all exemptions), that equates to about $50 per home valued at $600,000 – for all exemptions including those already in place.  Much of this is in the current budget; the additional impact is not known.