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1 Statement of Purpose. The general court hereby finds that allowing municipalities to tax land values at a higher rate than improvements can promote efficient land use, expand housing supply, reduce blight and vacancy, and shift the tax burden away from building investment.
2 New Subdivision; Land Value Taxation System. Amend RSA 76 by inserting after section 21 the following new subdivision:
Land Value Taxation System
76:22 Definitions. In this subdivision:
I. "Land value" means the assessed value of a parcel of real property exclusive of the value of any buildings, structures, or other improvements on the parcel.
II. "Improvement value" means the assessed value attributable to buildings, structures, and other improvements located on a parcel.
III. "Land value tax" or "LVT" means a municipal property tax system under which land value and improvement value are assessed separately and taxed at different rates as authorized by this subdivision.
IV. "Split-rate tax" means an LVT in which land value is taxed at a higher rate than improvement value.
V. "Pure land tax" means an LVT in which improvement value is taxed at a rate of zero.
VI. "Municipality" means a town, city, or village district with taxing authority.
VII. "Department" means the department of revenue administration.
VIII. "BTLA" means the board of tax and land appeals.
76:23 Adoption Authority.
I. Notwithstanding any other provision of law to the contrary, a municipality may adopt a LVT by the procedure in RSA 76:24 to apply to the municipal portion of the property tax rate.
II. Adoption of a LVT under this subdivision shall not alter, replace, or reduce the statewide education property tax or any county tax. Such components shall continue to be assessed and collected as provided elsewhere in law on total assessed value unless otherwise provided by statute.
76:24 Local Adoption.
I. Notwithstanding any provision of law to the contrary, a municipality may adopt a LVT by vote of its legislative body following:
(a) At least one public hearing noticed 14 days in advance; and
(b) The publication of a plain-language fiscal and distributional impact statement prepared by the governing body, with assistance from the assessing officials.
II. The warrant article or ordinance shall specify:
(a) Whether the municipality adopts a split-rate tax or a pure land tax;
(b) The initial tax differential, expressed as separate rates on land value and improvement value, subject to the parameters of RSA 76:27; and
(c) A transition schedule under RSA 76:28.
III. In towns, adoption shall be by majority vote at an annual or special town meeting. In cities, adoption shall be by majority vote of the city council subject to any charter-required mayoral approval or veto procedures.
IV. A municipality may rescind a LVT by the same process after at least 3 tax years of operation, with a transition plan under RSA 76:28, III.
76:25 Assessment Standards; Data Transparency.
I. Each municipality adopting a LVT shall ensure separate land and improvement values for every taxable parcel using mass appraisal methods consistent with international association of assessing officers standards, department rules, and RSA 21-J.
II. Assessing officials shall maintain and annually update a land value map or dataset and make parcel-level land and improvement values publicly available, subject to privacy protections in law.
III. The department shall adopt rules, pursuant to RSA 541-A, establishing minimum uniform standards for land/improvement split assessment, modeling, and ratio studies specific to LVT municipalities.
IV. Equalization studies for LVT municipalities shall separately analyze land and improvement assessment levels and uniformity.
76:26 Exemptions; Current Use; Special Classes.
I. All exemptions, credits, and deferrals authorized under state law, including veterans, elderly, disabled, and hardship/tax-deferral programs, shall remain available and shall be applied first to the improvement tax, then to the land tax, unless a local vote specifies a different sequence consistent with department rules.
II. Land enrolled in current use under RSA 79-A shall continue to be assessed and taxed as provided in RSA 79-A. A LVT shall apply only to value not governed by RSA 79-A.
III. Public utility property, tax-increment finance districts, and any special assessment districts shall be treated in accordance with their respective statutes; municipalities may, by vote, apply a LVT within districts so long as pledged revenues to the district are preserved.
76:27 Rate Setting; Parameters.
I. Each tax year, the governing body shall set two municipal rates: a land rate and an improvement rate.
II. In a split-rate system, the land rate shall be greater than the improvement rate. The improvement rate shall not exceed the land rate.
III. In a pure land tax, the improvement rate shall be zero.
IV. Municipalities may set the land rate at any level necessary to raise the amount to be raised by taxes for municipal purposes, taking into account the improvement rate, exemptions, and overlays.
V. The department shall provide forms and software support for dual-rate tax setting and tax bills.
76:28 Transition; Revenue Neutrality.
I. In the first fiscal year a LVT is implemented, the combined municipal tax levy raised under the LVT shall be revenue-neutral relative to what would have been raised under a uniform rate, excluding new appropriations adopted contemporaneously.
II. A municipality may phase in its chosen LVT over 2 to 5 tax years by annually adjusting the relative land and improvement rates toward the adopted target.
III. A municipality adopting a LVT shall establish by ordinance a circuit breaker, reducing or deferring the municipal tax on eligible low- and moderate-income taxpayers whose property tax liability exceeds a threshold percentage of household income. Deferred taxes shall constitute a lien as provided by RSA 80.
IV. Nothing in this section shall limit the use of existing deferral and abatement authorities under RSA 72 and RSA 76.
76:29 Appeals.
I. Taxpayers may appeal land value and improvement value assessments as provided in RSA 75 and RSA 76:16-a, and to the BTLA under RSA 71-B.
II. For LVT municipalities, assessment appeals may challenge the apportionment between land and improvement values as well as total value.
76:30 Administration; Training; Grants.
I. The department shall offer technical assistance and training to municipalities considering or implementing a LVT, including model ordinances, data standards, and public education materials.
II. Subject to appropriation, the department may award one-time implementation grants to municipalities for data conversion, modeling, and taxpayer communication.
76:31 Reporting; Sunset Review.
I. Each LVT municipality shall file an annual report with the department summarizing rate choices, distributional impacts, building permits, vacancy rates, and land use indicators designated by the department.
II. On January 1, 2032, the department shall submit a report to the fiscal committees of the general court, and other applicable committees as determined by the department, evaluating fiscal, housing, and economic outcomes of this subdivision and recommend any statutory changes.
76:32 Contingency for Education Tax. Nothing in this act shall modify the calculation, assessment, or collection of the statewide education property tax under RSA 76. Municipal adoption of a LVT shall apply only to the municipal portion of the property tax.
76:33 Rulemaking. The department of revenue administration shall adopt rules, pursuant to RSA 541-A, to implement this act, including assessment standards, equalization studies, billing formats, and taxpayer communications rules.
3 Department of Revenue Administration; Appropriation. There is hereby appropriated to the department of revenue administration the sum of $1 for the fiscal year ending June 30, 2027, for the purpose of implementing and supporting the municipal land value tax program established in RSA 76:22 through RSA 76:33. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.
4 Effective Date. This act shall take effect January 1, 2027.
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1 Statement of Purpose. The general court hereby finds that allowing municipalities to tax land values at a higher rate than improvements can promote efficient land use, expand housing supply, reduce blight and vacancy, and shift the tax burden away from building investment.
2 New Subdivision; Land Value Taxation System. Amend RSA 76 by inserting after section 21 the following new subdivision:
Land Value Taxation System
76:22 Definitions. In this subdivision:
I. "Land value" means the assessed value of a parcel of real property exclusive of the value of any buildings, structures, or other improvements on the parcel.
II. "Improvement value" means the assessed value attributable to buildings, structures, and other improvements located on a parcel.
III. "Land value tax" or "LVT" means a municipal property tax system under which land value and improvement value are assessed separately and taxed at different rates as authorized by this subdivision.
IV. "Split-rate tax" means an LVT in which land value is taxed at a higher rate than improvement value.
V. "Pure land tax" means an LVT in which improvement value is taxed at a rate of zero.
VI. "Municipality" means a town, city, or village district with taxing authority.
VII. "Department" means the department of revenue administration.
VIII. "BTLA" means the board of tax and land appeals.
76:23 Adoption Authority.
I. Notwithstanding any other provision of law to the contrary, a municipality may adopt a LVT by the procedure in RSA 76:24 to apply to the municipal portion of the property tax rate.
II. Adoption of a LVT under this subdivision shall not alter, replace, or reduce the statewide education property tax or any county tax. Such components shall continue to be assessed and collected as provided elsewhere in law on total assessed value unless otherwise provided by statute.
76:24 Local Adoption.
I. Notwithstanding any provision of law to the contrary, a municipality may adopt a LVT by vote of its legislative body following:
(a) At least one public hearing noticed 14 days in advance; and
(b) The publication of a plain-language fiscal and distributional impact statement prepared by the governing body, with assistance from the assessing officials.
II. The warrant article or ordinance shall specify:
(a) Whether the municipality adopts a split-rate tax or a pure land tax;
(b) The initial tax differential, expressed as separate rates on land value and improvement value, subject to the parameters of RSA 76:27; and
(c) A transition schedule under RSA 76:28.
III. In towns, adoption shall be by majority vote at an annual or special town meeting. In cities, adoption shall be by majority vote of the city council subject to any charter-required mayoral approval or veto procedures.
IV. A municipality may rescind a LVT by the same process after at least 3 tax years of operation, with a transition plan under RSA 76:28, III.
76:25 Assessment Standards; Data Transparency.
I. Each municipality adopting a LVT shall ensure separate land and improvement values for every taxable parcel using mass appraisal methods consistent with international association of assessing officers standards, department rules, and RSA 21-J.
II. Assessing officials shall maintain and annually update a land value map or dataset and make parcel-level land and improvement values publicly available, subject to privacy protections in law.
III. The department shall adopt rules, pursuant to RSA 541-A, establishing minimum uniform standards for land/improvement split assessment, modeling, and ratio studies specific to LVT municipalities.
IV. Equalization studies for LVT municipalities shall separately analyze land and improvement assessment levels and uniformity.
76:26 Exemptions; Current Use; Special Classes.
I. All exemptions, credits, and deferrals authorized under state law, including veterans, elderly, disabled, and hardship/tax-deferral programs, shall remain available and shall be applied first to the improvement tax, then to the land tax, unless a local vote specifies a different sequence consistent with department rules.
II. Land enrolled in current use under RSA 79-A shall continue to be assessed and taxed as provided in RSA 79-A. A LVT shall apply only to value not governed by RSA 79-A.
III. Public utility property, tax-increment finance districts, and any special assessment districts shall be treated in accordance with their respective statutes; municipalities may, by vote, apply a LVT within districts so long as pledged revenues to the district are preserved.
76:27 Rate Setting; Parameters.
I. Each tax year, the governing body shall set two municipal rates: a land rate and an improvement rate.
II. In a split-rate system, the land rate shall be greater than the improvement rate. The improvement rate shall not exceed the land rate.
III. In a pure land tax, the improvement rate shall be zero.
IV. Municipalities may set the land rate at any level necessary to raise the amount to be raised by taxes for municipal purposes, taking into account the improvement rate, exemptions, and overlays.
V. The department shall provide forms and software support for dual-rate tax setting and tax bills.
76:28 Transition; Revenue Neutrality.
I. In the first fiscal year a LVT is implemented, the combined municipal tax levy raised under the LVT shall be revenue-neutral relative to what would have been raised under a uniform rate, excluding new appropriations adopted contemporaneously.
II. A municipality may phase in its chosen LVT over 2 to 5 tax years by annually adjusting the relative land and improvement rates toward the adopted target.
III. A municipality adopting a LVT shall establish by ordinance a circuit breaker, reducing or deferring the municipal tax on eligible low- and moderate-income taxpayers whose property tax liability exceeds a threshold percentage of household income. Deferred taxes shall constitute a lien as provided by RSA 80.
IV. Nothing in this section shall limit the use of existing deferral and abatement authorities under RSA 72 and RSA 76.
76:29 Appeals.
I. Taxpayers may appeal land value and improvement value assessments as provided in RSA 75 and RSA 76:16-a, and to the BTLA under RSA 71-B.
II. For LVT municipalities, assessment appeals may challenge the apportionment between land and improvement values as well as total value.
76:30 Administration; Training; Grants.
I. The department shall offer technical assistance and training to municipalities considering or implementing a LVT, including model ordinances, data standards, and public education materials.
II. Subject to appropriation, the department may award one-time implementation grants to municipalities for data conversion, modeling, and taxpayer communication.
76:31 Reporting; Sunset Review.
I. Each LVT municipality shall file an annual report with the department summarizing rate choices, distributional impacts, building permits, vacancy rates, and land use indicators designated by the department.
II. On January 1, 2032, the department shall submit a report to the fiscal committees of the general court, and other applicable committees as determined by the department, evaluating fiscal, housing, and economic outcomes of this subdivision and recommend any statutory changes.
76:32 Contingency for Education Tax. Nothing in this act shall modify the calculation, assessment, or collection of the statewide education property tax under RSA 76. Municipal adoption of a LVT shall apply only to the municipal portion of the property tax.
76:33 Rulemaking. The department of revenue administration shall adopt rules, pursuant to RSA 541-A, to implement this act, including assessment standards, equalization studies, billing formats, and taxpayer communications rules.
3 Department of Revenue Administration; Appropriation. There is hereby appropriated to the department of revenue administration the sum of $1 for the fiscal year ending June 30, 2027, for the purpose of implementing and supporting the municipal land value tax program established in RSA 76:22 through RSA 76:33. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.
4 Effective Date. This act shall take effect January 1, 2027.