In an effort to generate more money for local communities, a group of state representatives has proposed a tax surcharge for some second homes and short-term rental properties.
One bill from Rep. Jonah Wheeler, a Democrat from Peterborough, would place an additional 0.75% levy on residential properties worth over $500,000 that are not anyone’s primary home.
People with second homes who live there less than half the year, Wheeler said, should kick in to help their towns since they’re taking up housing stock. He said he wanted to start a conversation on how to tackle New Hampshire’s sky-high property taxes.
“I do my best not to be a typical liberal, but in this instance I think that we do have to address a situation where these homes are left empty and people are not contributing back to the communities in which they are residing in,” Wheeler told the House Ways and Means Committee on Monday, “at the same time while the people who spend 365 days out of the year are having to be priced out.”
Under this proposal, second homes assessed at $500,000 would be charged $3,750 more in addition to their regular property taxes. Wheeler said all that money would go straight back to the municipalities where the homes are located.
It isn’t likely to have an outsized impact in Concord, which is home to just a handful of vacation homes and short-term rentals, but some lawmakers thought the surcharge could prove especially useful for the Seacoast, the Lakes Region and ski areas that see more tourists.
Others argued that property value shouldn’t be the sole indicator of a person’s wealth or ability to pay that tax; plus, if some homes are occupied less than half the year, they’re probably not using as many utilities or other services as their neighbors.
Some might wonder, said Rep. Bill Ohm, a Republican from Nashua, “Why am I being charged more money than somebody who is living here and demanding more city services?”
Monica Courville, who lives in North Conway, owns an AirBnb with her husband. They bought it four years ago for $225,000, and its value has more than doubled. Soon, they expect it to cross the $500,000 benchmark.
Courville said she makes roughly $12,000 each year from renting it out and plans to use it as their retirement home someday. The tax surcharge would amount to nearly one-third of that income.
“A lot of big investors are buying, and corporate investors are making a lot of money on these,” Courville said. “But him and I — it’s a mom and pop shop — the ones who are hurting are not the big investors, are people like me that own one or two AirBnbs.”
Another proposed bill, sponsored by Newmarket Democrat Rep. Ellen Read and supported by Wheeler, takes a different approach to encouraging more housing availability in New Hampshire. It’d add a duplicate tax to residential properties that are either unoccupied or used as short-term rentals for more than half the year, to be paid to the state.
That way, she said, people wouldn’t be targeted on the basis of wealth. Instead, she said, all they’d have to do is rent it out as housing.
“You have a right to keep your property out of rent,” Read said, “but in a housing crisis, you don’t have a right to keep it out of the rental market without paying something back into the state, because you are actively harming the state when we’re in the middle of a housing crisis.”