View tax

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According to some accounts, the view tax is the informal name for a tax proposed by the New Hampshire State Legislature in 2006 that would increase the property tax rate on a residence that has a "pleasing view" (the exact wording of the bill has not yet been determined) throughout the state. The tax has been implemented in some municipalities since 2003. The idea has encountered heavy resistance from New Hampshire taxpayers (who historically have been fundamentally opposed to taxation), although some claim that it is necessary to provide the state government with additional sources of revenue, as New Hampshire has neither a general goods and services sales tax nor an income tax on wages.

On the other hand, the official position of the New Hampshire Assessing Standards Board is, and has always been, that the "view" is merely one necessary factor in determination of the "fair market value" for a given property. In other words, a property with a nicer view may well fetch a higher price on the open market. An assessor should consider the view, just as he or she would consider the comparable value of other desirable amenities. Only recently have some assessors begun itemizing the "view" as a line item with a dollar amount. Unlike measuring square footage and aging bathrooms, the value of a view could be seen as a subjective criterion. However, equalization according to recent sales should closely match the assessed values for comparable properties, and the view from a nice house on twenty acres is the same as the view from a "fixer upper" on a third of an acre next door, thus saddling the latter with a "view tax" of sorts.

Problems have arisen where lands have been re-assessed according to recent sales made to so-called "outsiders" (often vacationing urbanites) who are willing to pay a huge premium for a property with a breath-taking view, with or without a house on it. This inevitably inflates the (potential) value of adjacent parcels, much to the chagrin of those content to pay tax on the value of the previously under-appreciated land. However, the fact remains that the market drives the value, whether or not the adjacent owner wants to sell or be left alone. The same phenomenon occurs when a waterfront area is "discovered" and beach property suddenly becomes very valuable, whether or not long-time residents are selling or staying. Their taxes go up as land values go up.

Under a related New Hampshire program called "current use", a qualifying parcel can be assessed at the value of its current use (e.g., unproductive forest) rather than its "highest and best use" such as a resort-style development. This can save land owners up to 90 percent on their tax bill. Unfortunately, the "current use" abatement does not apply to "improved" portions of the land, such as houses and other structures, nor to parcels smaller than ten acres, so the "view factor" may affect smaller parcels disproportionately. For example, a 100-acre (0.40 km²) parcel with all but 2 acres (around the house) in current use might be assessed for $400,000, where the 98 undeveloped acres account for less than $10,000 of that value. A 2 acre neighbor's house may be taxed at the equivalent of $150,000 per acre. It can be tempting to balance things out among otherwise comparable properties by attributing "excess value" to the "view factor," even if other distinguishing factors are also present.