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Property Tax Abatements: The New Hampshire Circumstance

It’s been a year since the coronavirus has come to light, hence, the name COVID-19—coronavirus disease 2019. In just a few months, the world will be celebrating the anniversary of the coronavirus pandemic. Perhaps celebrating is the wrong word for it. The point is, it’s been almost a year when the entire world has experienced the disease that affected everybody.

Not a single person was immune to the ill effects of the virus. If they weren’t affected health-wise, they certainly felt its ramifications in terms of economics and relationships. A lot of people lost their jobs while some have to adjust to working fewer hours. Work had to shift to the home environment as well.

There were so many adjustments that people had to cope with without fair warning. One of those adjustments was on a person’s buying practices. Instead of going to the store and buying products—essentials or not—they just shop online. Whether they are afraid or go out or constrained by the stay-at-home rules at the start of the pandemic, it’s a fact that buying habits had to shift.

So, what happens to commercial spaces?

New Hampshire property taxation

With companies shifting to work-from-home format, it leaves a lot of unused office space. Malls are no longer densely occupied. Plus, it’s not a great time to buy properties because a lot of people are financially struggling.

The coronavirus pandemic has shone a spotlight on the need to rethink the use of commercial spaces. With that much space and a definite decrease in earnings for fiscal year 2020—for most companies that is—there was a need for rent deferrals.

In the case of New Hampshire, property taxation is based on ad valorem. This means that taxing a property will be determined through a percentage of the fair market value of the land or building (or both) that is subject to taxation. Every town is mandated to appraise the real properties within the boundaries.

In New Hampshire, taxation should be proportionate. It takes a more complex turn when one taxpayer owns multiple properties in the same town. Appraisal doesn’t just look at one property’s fair market value but also its comparison to other properties in the same community.

Before COVID-19, the calculation is determined every year by the New Hampshire Department of Revenue Administration. The determinant is called the median equalization ratios. To be more specific about it, if the median equalization ratio is 95%, this means that all real estate in a particular community will be assessed at 95% of its fair market value. For a taxpayer with multiple properties in the same town, this means that they will get an aggregate assessment of fair market value.


Knowing that everybody is having a hard time—financially and otherwise—during the pandemic, taxpayers can make a legal plea in terms of property taxation. New Hampshire has a Revised Statutes Annotated 76:16, which provides for a brief period of time where one can challenge the property assessment after having received the year-end tax bills for the specific fiscal year.

Taking this into consideration, taxpayers can request for abatement on or before March 1, 2021. The request will be filed before selectmen and other authorized representatives of the area.

On the part of the selectmen, they should respond to the abatement request not later than July 1. If the selectmen deny the request or even if they don’t respond to it, the taxpayer can make an appeal. The said appeal should be filed before the Superior Court of the county where the property lies, or before the Board of Tax and Land Appeals. The appeal should be filed not later than Sept. 1.

The process should be properly documented. The New Hampshire Assessing Standards Board has put it as responsibilities of the selectmen and retained assessors to make the procedures accurate, credible, fair, and transparent. Those should not be n the way of the selectmen’s autonomous legal and credible responsibilities to make sure that assessments are reflective of the fair market value or that these are proportional.

It has to be noted, though, that the burden of proof to show that there was over assessment of properties lies with the taxpayer.


This means that the taxpayer should know how to determine the fair market value. This way, they can appropriately conclude they the assessment of their tax is greater than the actual valuation.

There are three ways to identify the fair market value: income / income capitalization approach, cost approach, and sales comparison approach.

The income approach is used to determine the fair market value of income-generating properties. This means that the expected income will be the basis to look at the anticipated benefits that the property may accomplish.

The cost approach, on the other hand, will make an estimated value by checking the cost required to reproduce the property when depreciation is taken into consideration.

Lastly, the sales comparison approach puts side by side the subject property and other recent sales, including adjustments.

The New Hampshire Supreme Court doesn’t favor one particular approach in its decisions. The appropriate valuation type or approach will depend on the kind of property that is being discussed. As the burden of proof lies on the taxpayer, there should be prudence in looking at the assessment of the property.

Abatement is necessary especially as people are grappling with the economic effects of the pandemic.

Real estate investment

One of the known economic consequences of COVID-19 is the drop in real estate investment. Commercial office space recorded the sharpest drop in economic returns. Obviously, it is not the right time to invest in office spaces when people are still working from home. Unless the majority of the population have been vaccinated, it is still best to just stay at home.

Retail, too, has seen a large drop in returns and investments. A lot of stores, particularly those selling non-essentials, were forced to close since they couldn’t keep up with fiscal responsibilities. Hospitality, too, is in the same vain as people are discouraged from going on vacations.

These matters affect valuation methods as the drop in real estate investment and returns affect the fair market value.

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