City of Manchester, NH Official Website

Tax Rates

The City Assessor has three major duties; to discover, list and estimate the value of all taxable property within the jurisdiction of the city.

To insure that all property is treated uniformly, the Assessor's procedures must conform to State laws dealing with property taxation. Furthermore, commonly accepted appraisal and accounting practices must be used.

Process

1. Assessed value and the Tax Rate
  • The Assessor's primary responsibility is to find the fair market value of your property, so that you and other taxpayers may contribute a fair share of support for the community services you receive.
  • For these services to continue, other agencies, as well as the city, must levy taxes. Here again, state laws define the powers of these taxing agencies and the kinds of properties that are exempt from taxes, such as schools, scout camps, and churches.
  • Each year the governing bodies of the various taxing agencies propose budgets for the next year. To finance the expenditures in the budget, they total all expected sources of revenue such as state aids and shared taxes, license fees and tuition. This is subtracted from the estimated expenditures. The remainder, which is the total amount to be collected through property taxes, is the called the "tax levy." The amount of the tax levy for the City of Manchester depends on the size of the City budget. The levy is raised by multiplying the value of all the property in the City by a percentage, called the tax rate. The rate is the same for all property owners. When this tax rate is applied to the value of all the taxable property in the city, it will total to the exact amount of money needed for the levy to help finance City expenses.
  • The tax rate is calculated by simply dividing the amount of taxes needed by the total assessed value of all taxable property in the City.
  • Tax Rate = Levy ÷ Total Assessed Value
  • Once the rate is set, the assessed value of your property is used to determine your portion of the levy. The tax rate when multiplied by the assessed value of your property, equals what you owe in taxes -- your tax bill. The tax rate is often expressed in terms of dollars per thousand, or as a "mill rate."
  • The entire taxation process requires the cooperation of several parts of City government. The Assessor sets the value of your property. The Mayor and New Hampshire Department of Revenue Administration determine the cost of City services, thereby establishing the tax rate necessary to generate funds for these services.
2. Discovering Property
  • The Assessor must maintain accurate maps identifying each parcel of land in the city. So there are no omissions, great care is taken to insure that these maps are kept up to date.
  • The Assessor maintains close coordination with other city offices to keep informed of building activity.
  • Finally, constant attention must be given to businesses which sell, move, or come into the city to insure that all property receives an equitable assessment.
3. How the Assessor goes about valuing property
  • To find the value of any piece of property the Assessor must first know what properties similar to it are selling for, what it would cost today to replace it, how much it takes to operate and keep it in repair, what rent it may earn, and many other dollar factors affecting its value, such as the current rate of interest charged for borrowing the money to buy or build properties like yours.
  • Using these facts the Assessor can then go about estimating the property's value in three different ways.
4. Listing Property
  • So that your property is not confused with another property, the Assessor must establish a record showing you as the owner. The office records your mailing address, describes the property in detail, prepares a legal description and identifies your property on an assessor's map by parcel number.
  • When values are finally estimated and listed on the annual assessment roll, they must be classified as either residential, mercantile, manufacturing or agricultural. This information is listed on the assessment roll and is open to public inspection.
5. The Market Approach
  • The first way is to find properties like yours which have been sold recently. Their selling prices, however, must be analyzed very carefully to get at the true picture. One property may have sold for more than it was really worth because the buyer was in a hurry to occupy the property and would pay any price to get in.
  • Another may have sold for less money than it was actually worth because the owner needed cash right away and was willing to sell to the first buyer who made an offer.
  • Using this approach (comparing the selling prices of properties similar to yours) the Assessor must always consider such over- or under-pricing to arrive at a fair evaluation of your property's value. Various statistical procedures are employed in this process.
6. The Cost Approach
  • The second way the Assessor can go about this is based on how much money it would take, at current material and labor costs, to replace your property with one just like it. If your property is not new, the Assessor must also determine how much depreciation it has suffered.
7. The Income Approach
  • The third method is used in addition to the other two if you happen to own property that provides you with a rental income, like an apartment house, a store, or an office building. Here the Assessor must consider such dollar factors as your operating expenses, taxes, insurance, maintenance costs, the degree of financial risk you have taken in earning income from your property, and finally, the return most people would expect to realize on this kind of property.
  • Of course, if your property is the home you live in, the third approach cannot be used since you derive no income from it. But in any case, you can be sure the Assessor carefully considers all the available, reliable money factors pertaining to your property.
8. Valuing Property
  • Estimating the market value of your property is simply a matter of determining the price most people would pay for it in its present condition.
  • However, the Assessor has the monumental job of valuing all of the houses, all of the shopping centers, the office buildings, and the many apartment units in Manchester. This includes estimating the value of all of the office equipment and fixtures.
  • This is done so that the costs of schools, fire and police protection, health and recreational facilities, and other public services can be prorated over all taxable property in the city. Your share of the cost of these services is based upon the value of your property relative to the total value of all property in the city. The value of your property, as determined by the Assessor, is called the "assessed value."
9. Why Assessed value changes from year to year
  • When market value changes, naturally so does assessed value. For instance, if you were to increase the total market value of your property by building a garage, or adding a family room, the assessed value would increase.
  • Similarly, should your property's value be decreased by a fire, the assessed value would decrease to show the downward effect of this damage on the market value of your property.
  • For any number of reasons a neighborhood, or a particular house style, may become very popular, thus causing market values to rise at higher than average rates. The Assessor must constantly stay alert to spot these trends.
  • Inflation and the economy of the entire community also affects your assessed value. We all know that as building material, labor and the cost of money increases, the value of the existing housing stock also increases.
  • The Assessor has not created this value -- people have made value by their transactions in the market place. It is the Assessor's responsibility each year to adjust existing assessments to keep pace with the market.

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