A buyer purchases a vacation home on Lake Winnipesaukee in New Hampshire for $600,000. The seller has 40 acres of adjacent forested land enrolled in the Current Use Taxation Program that is included in the sale. The full market value of the entire property (home plus land) is $600,000. The land use change tax is assessed at 10% of the full market value of the land only, which is appraised at $120,000. What is the total of the NH Real Estate Transfer Tax (paid by buyer and seller combined) plus the land use change tax triggered by this transaction?
Correct Answer
D) Total combined: $21,000 (transfer tax $9,000, land use change tax $12,000)
Step 1 — NH Real Estate Transfer Tax (RSA Chapter 78-B): Total tax = ($600,000 ÷ $100) × $1.50 = 6,000 × $1.50 = $9,000 total (buyer pays $4,500, seller pays $4,500). Step 2 — Land Use Change Tax (RSA Chapter 79-A): The tax is 10% of the full market value of the land being removed from Current Use. Land market value = $120,000. Land use change tax = $120,000 × 10% = $12,000. Step 3 — Combined total: $9,000 (transfer tax) + $12,000 (land use change tax) = $21,000.
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