Comparison of Southern Maine vs. NH Seacoast Area (Auburn, Kittery: sales, real estate)
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I must be missing something here and would like some feedback.
I'll be moving back to the seacoast area of NH or Maine in 5-6 years after I retire from the AF. I'm looking at buying land now while it's a buyers market in order to have it paid off by that time. I was born in raised in Kittery, but have also lived in Portsmouth and Dover. I want to be within 45 minutes of Portsmouth, as I may work at the Portsmouth Naval Shipyard or the former Pease AFB upon retirement.
Property taxes are certainly higher in NH and lower in Maine, but only by $1-2K for a house/land valued around $300K (I want an acre or two or three with a 1800 sq ft ranch on it), depending on the town. I saw towns like the Berwicks coming in around $3000, Kittery around $4000, and Wells around $2500-$3000. NH towns that I looked at ranged from $4000 to $6000. Of course, this was an unscientific survey of comparable properties on the NH and ME MLS, looking at taxes paid for the previous year.
Income tax is an issue in ME. I paid it every year since I started working until I entered the AF. Back then, I don't believe I made enough to really pay a lot. I wanted to see if the lower property taxes in S. Maine would outweigh the $$ I would fork over to the State of ME in income taxes. Land is a little cheaper in ME, maybe 20% depending on the town. Sales tax is not an issue in this area because most shopping would be done a short distance away in NH.
I did a hypothetical calculation based on my projected financial situation when I retire (using today's dollars and tax rates). My military retirement is worth $40K. I assume I'd get a job that pays about $50K (not that hard in the seacoast area). I assumed about $20K per year for my wife's part time employment (nothing high paying). So about $110K total between the wife and I - solidly middle class.
I ran the numbers using a hypothetical Fed and ME 1040. I was shocked to realize I would pay $6129 in income taxes to ME, and that includes a $6K deduction for military pensions. So, if I lived in Maine (and worked in NH or Maine) and saved $2K in property taxes, I'd come out $4K in the red compared to living in NH.
That's a lot of taxes to live in an area that's not much cheaper than across the border in NH. And the money you save with the slightly cheaper land (one time savings) is offset by the yearly check to the Maine Dept of Revenue. I've seen the posts with the discussion back and forth talking about whether Maine is a low or high tax state. Based on my projected income and the property tax rates in the area I want to settle in, I'd say Maine is a very high tax state (at least the Southern part of it).
What am I missing here? It seems like people would be crazy to live 5-10 miles from the NH border and pay all that extra money in income taxes. Maybe I'm just making too much money to make it pay to live in ME? I know the first $38K or so of income is not taxed in ME, but from there it goes up dramatically (8.5%?). Property taxes would have to be a LOT lower to make paying that income tax worthwhile.
I know you folks up north will say "that's why we live in Northern Maine" - noted. I've got family on the Seacoast and want to settle there. What do you folks that live in Southern Maine have to say? I was always leaning towards NH because of the better economy and more fiscal responsibility that NH is known for, but this calculation I did today kinda seals the deal....
I must be missing something here and would like some feedback.
I'll be moving back to the seacoast area of NH or Maine in 5-6 years after I retire from the AF. I'm looking at buying land now while it's a buyers market in order to have it paid off by that time.
Good plan.
I am retired Navy.
Quote:
... Property taxes are certainly higher in NH and lower in Maine
Be careful with that attitude.
Whenever I mention how other states have higher taxes, I tend to get blasted.
Part of the Maine attitude is the absolute insistence that Maine taxes are 'high'.
Even when they may be low in terms of numbers, just nod your head and agree. "Oh yes it is terrible, Maine has the highest taxes on the planet" And you will be fine.
Quote:
... Income tax is an issue in ME. I paid it every year since I started working until I entered the AF. Back then, I don't believe I made enough to really pay a lot. I wanted to see if the lower property taxes in S. Maine would outweigh the $$ I would fork over to the State of ME in income taxes.
Hmm, I don't know.
As a Military retiree my income is not high enough to qualify me to pay Maine state income taxes.
My Dw works part time, and we have investment income; perhaps some future year our income may rise enough to get us into that strata. I don't know.
Quote:
... Land is a little cheaper in ME, maybe 20% depending on the town. Sales tax is not an issue in this area because most shopping would be done a short distance away in NH.
As you go further North land prices drop a great deal more than what you have seen.
Quote:
... I did a hypothetical calculation based on my projected financial situation when I retire (using today's dollars and tax rates). My military retirement is worth $40K. I assume I'd get a job that pays about $50K (not that hard in the seacoast area). I assumed about $20K per year for my wife's part time employment (nothing high paying). So about $110K total between the wife and I - solidly middle class.
I ran the numbers using a hypothetical Fed and ME 1040. I was shocked to realize I would pay $6129 in income taxes to ME, and that includes a $6K deduction for military pensions. So, if I lived in Maine (and worked in NH or Maine) and saved $2K in property taxes, I'd come out $4K in the red compared to living in NH.
That's a lot of taxes to live in an area that's not much cheaper than across the border in NH. And the money you save with the slightly cheaper land (one time savings) is offset by the yearly check to the Maine Dept of Revenue. I've seen the posts with the discussion back and forth talking about whether Maine is a low or high tax state. Based on my projected income and the property tax rates in the area I want to settle in, I'd say Maine is a very high tax state (at least the Southern part of it).
I paid $900 per acre for my land.
I paid a high price because my land is river frontage.
Across the road land here sells for $300 per acre.
Quote:
...
What am I missing here? It seems like people would be crazy to live 5-10 miles from the NH border and pay all that extra money in income taxes. Maybe I'm just making too much money to make it pay to live in ME? I know the first $38K or so of income is not taxed in ME, but from there it goes up dramatically (8.5%?). Property taxes would have to be a LOT lower to make paying that income tax worthwhile.
I know you folks up north will say "that's why we live in Northern Maine" - noted. I've got family on the Seacoast and want to settle there. What do you folks that live in Southern Maine have to say? I was always leaning towards NH because of the better economy and more fiscal responsibility that NH is known for, but this calculation I did today kinda seals the deal....
Forest Beekeeper,
Your numbers really highlight the fact that southern Maine is vastly different than the rest of the state. I was just pointing out that the only difference between southern Maine and NH, with the property taxes and real estate values being not that much different, is a 8.5% income tax and a sales tax (5%?).
If I retired in your neck of the woods, I would only need to work if I got bored . It's amazing how inexpensive the land and property taxes are up there. Don't want to be that far away from family, though. Parents are getting older and their health/independence will be an issue. I want to be within an hour of them. Looks like it will be in NH for me.
Forest Beekeeper,
Your numbers really highlight the fact that southern Maine is vastly different than the rest of the state. I was just pointing out that the only difference between southern Maine and NH, with the property taxes and real estate values being not that much different, is a 8.5% income tax and a sales tax (5%?).
If I retired in your neck of the woods, I would only need to work if I got bored . It's amazing how inexpensive the land and property taxes are up there. Don't want to be that far away from family, though. Parents are getting older and their health/independence will be an issue. I want to be within an hour of them. Looks like it will be in NH for me.
Yes.
The small area near the Southern border is very much different from most of Maine.
I must be missing something here and would like some feedback.
I'll be moving back to the seacoast area of NH or Maine in 5-6 years after I retire from the AF. I'm looking at buying land now while it's a buyers market in order to have it paid off by that time. I was born in raised in Kittery, but have also lived in Portsmouth and Dover. I want to be within 45 minutes of Portsmouth, as I may work at the Portsmouth Naval Shipyard or the former Pease AFB upon retirement.
Property taxes are certainly higher in NH and lower in Maine, but only by $1-2K for a house/land valued around $300K (I want an acre or two or three with a 1800 sq ft ranch on it), depending on the town. I saw towns like the Berwicks coming in around $3000, Kittery around $4000, and Wells around $2500-$3000. NH towns that I looked at ranged from $4000 to $6000. Of course, this was an unscientific survey of comparable properties on the NH and ME MLS, looking at taxes paid for the previous year.
Income tax is an issue in ME. I paid it every year since I started working until I entered the AF. Back then, I don't believe I made enough to really pay a lot. I wanted to see if the lower property taxes in S. Maine would outweigh the $$ I would fork over to the State of ME in income taxes. Land is a little cheaper in ME, maybe 20% depending on the town. Sales tax is not an issue in this area because most shopping would be done a short distance away in NH.
I did a hypothetical calculation based on my projected financial situation when I retire (using today's dollars and tax rates). My military retirement is worth $40K. I assume I'd get a job that pays about $50K (not that hard in the seacoast area). I assumed about $20K per year for my wife's part time employment (nothing high paying). So about $110K total between the wife and I - solidly middle class.
I ran the numbers using a hypothetical Fed and ME 1040. I was shocked to realize I would pay $6129 in income taxes to ME, and that includes a $6K deduction for military pensions. So, if I lived in Maine (and worked in NH or Maine) and saved $2K in property taxes, I'd come out $4K in the red compared to living in NH.
That's a lot of taxes to live in an area that's not much cheaper than across the border in NH. And the money you save with the slightly cheaper land (one time savings) is offset by the yearly check to the Maine Dept of Revenue. I've seen the posts with the discussion back and forth talking about whether Maine is a low or high tax state. Based on my projected income and the property tax rates in the area I want to settle in, I'd say Maine is a very high tax state (at least the Southern part of it).
What am I missing here? It seems like people would be crazy to live 5-10 miles from the NH border and pay all that extra money in income taxes. Maybe I'm just making too much money to make it pay to live in ME? I know the first $38K or so of income is not taxed in ME, but from there it goes up dramatically (8.5%?). Property taxes would have to be a LOT lower to make paying that income tax worthwhile.
I know you folks up north will say "that's why we live in Northern Maine" - noted. I've got family on the Seacoast and want to settle there. What do you folks that live in Southern Maine have to say? I was always leaning towards NH because of the better economy and more fiscal responsibility that NH is known for, but this calculation I did today kinda seals the deal....
With respect to your specific question comparing Southern Maine to seacoast NH. I would imagine that these are not the only differences that will effect you.
Maine has a sales tax, Nh does not. You could still get away with shopping in NH (no sales tax) and filling up in NH (10cents less gas tax than Maine). But buy a car while living in Maine and it will cost you more. I have done the comparisons and it will cost you more to register it too!
Being retired military you probably will not have to worry about health care which is good considering Maine's monthly costs run double than NH.
Still consider the a lot of towns and cities in Maine have mil rates (property taxes) just as high as NH. Here in Auburn my mil rate is about $20 "200k house = 4k in property taxes ;( "
Whenever I mention how other states have higher taxes, I tend to get blasted.
Part of the Maine attitude is the absolute insistence that Maine taxes are 'high'.
Even when they may be low in terms of numbers, just nod your head and agree. "Oh yes it is terrible, Maine has the highest taxes on the planet" And you will be fine.
I've come to the conclusion that everyone thinks that their tax burden is the worst. I hear Mainers complain about taxes and some point to NH as being a better situation. But go over there and you will find them complaining about... you guessed it... high taxes.
Guess what people in VT complain about? MA? NY? etc etc etc.
"I know the first $38K or so of income is not taxed in ME, but from there it goes up dramatically (8.5%?). Property taxes would have to be a LOT lower to make paying that income tax worthwhile."
Is this correct? No taxes on first 38K of income? Does that mean a pension income that is under 38K is not taxed? And if that income is supplemented by Soc Sec does that apply also? I thought taxes were paid on all income in Maine? I sure hope I am interpreting what was posted correctly!
"I know the first $38K or so of income is not taxed in ME, but from there it goes up dramatically (8.5%?) Property taxes would have to be a LOT lower to make paying that income tax worthwhile."
That is not correct. Maine taxes everybody at 8.5%.
I've come to the conclusion that everyone thinks that their tax burden is the worst. I hear Mainers complain about taxes and some point to NH as being a better situation. But go over there and you will find them complaining about... you guessed it... high taxes.
Guess what people in VT complain about? MA? NY? etc etc etc.
Yeah, I tend to roll my eyes when the tax whiners come out of the woodwork. I've posted over 800 times. just about 0% of them are in tax debates (excluding this post, of course).
I've come to the conclusion that everyone thinks that their tax burden is the worst. I hear Mainers complain about taxes and some point to NH as being a better situation. But go over there and you will find them complaining about... you guessed it... high taxes.
Guess what people in VT complain about? MA? NY? etc etc etc.
good post
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