Overview of New Mexico Taxes
New Mexico has some of the lowest property tax rates in the U.S. The state’s average effective property tax rate is 0.78%. The median annual property tax paid by homeowners in New Mexico is $1,272, about $800 less than the national median.
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To calculate the exact amount of property tax you will owe requires your property's assessed value and the property tax rates based on your property's address. Please note that we can only estimate your property tax based on median property taxes in your area. There are typically multiple rates in a given area, because your state, county, local schools and emergency responders each receive funding partly through these taxes. In our calculator, we take your home value and multiply that by your county's effective property tax rate. This is equal to the median property tax paid as a percentage of the median home value in your county.
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Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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New Mexico Property Taxes
If you’re thinking about buying a home in the Land of Enchantment, there’s good news: New Mexico has among the lowest property taxes of any state in the U.S. The median annual property tax paid by homeowners in New Mexico is $1,272, about $800 less than the national median. Likewise, the state’s average effective property tax rate is 0.78%.
One reason property taxes in New Mexico are so low is that the state has capped the amount the taxable value of a property can increase in a year at 3%. That means that even when home prices are surging, property taxes will remain stable.
Our New Mexico mortgage guide will help make the homebuying process a bit easier by providing you with the key information you’ll want to be familiar with before getting a mortgage in the Land of Enchantment.
A financial advisor in New Mexico can help you understand how homeownership fits into your overall financial goals. Financial advisors can also help with investing and financial plans, including taxes, homeownership, retirement and more, to make sure you are preparing for the future.
How Do New Mexico Property Taxes Work?
In New Mexico, taxes on real estate are entirely used to support local governments and services. Nearly half of property tax revenue goes to county and city governments and about 30% goes to schools. Other recipients are hospitals and community colleges.
Taxes are based on the market value of property, which an assessor in each county calculates annually. Taxes in one year are based on the prior year’s market value, so your 2019 taxes will be based on the 2018 value of your home.
The taxable value of residential real estate in New Mexico is equal to one-third of the appraised value. Thus, if your home’s market value is $180,000, the taxable value will be $60,000 minus any exemptions. The most commonly claimed exemption is the head of family exemption, which reduces taxable value by $2,000 for any homeowner who provides the majority of financial support for his or her household.
One big way that New Mexico limits property tax increases is through a valuation cap. The valuation cap limits annual increases in appraised value to 3%. Thus, if your home value was $200,000 last year, it can’t be any more than $206,000 this year. The cap is lifted when a home is sold or when improvements are made to a home.
New Mexico Property Tax Rates
Tax rates in New Mexico are expressed in terms of mills, which are equal to $1 of tax for $1,000 of taxable value. So, if your taxable value after exemptions is $40,000 and your mill rate is 20 mills, your taxes owed will be $800. Rates differ between cities, counties, school districts and special districts.
It’s difficult to compare property taxes across areas that all use different rates. For that reason, we use effective tax rates for comparisons. An effective tax rate reflects the annual amount paid as a percentage of current home value. The table below shows the average effective tax rate for every county in New Mexico, as well as the median home value and the median annual property tax paid.
|County||Median Home Value||Median Annual Property Tax Payment||Average Effective Property Tax Rate|
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The largest New Mexico county in terms of population, Bernalillo County also has among the highest property tax rates in the state. The county’s average effective property tax rate is 1.02%, second highest in the state.
In Albuquerque, which is the largest city in both the county and the state, the total 2018 mill rate was 47.75 mills for residential property. Of that, 10.473 mills went to school districts, 11.229 mills went to the city government and 8.49 mills went to the county. A tax supporting the University of New Mexico Hospital was responsible for 6.4 mills.
If you have questions about how property taxes can affect your overall financial plans, a financial advisor in Albuquerque can help you out.
Doña Ana County
This southern New Mexico county has property taxes that are slightly lower than the state average. The median annual property tax payment in the county is $1,010. That is about $300 less than the state median and $1,100 less than the national median.
The largest city in Doña Ana County is Las Cruces, which is the second largest city in the state. The mill rate in Las Cruces was 31.32 mills in 2018, far lower than the mill rate in the state’s largest city, Albuquerque.
Santa Fe County
Santa Fe County may be a good choice for you if you’re looking for low property taxes in New Mexico. The county’s average effective property tax rate is just 0.53%, which ranks as the 14th lowest out of 33 counties in the state. At that rate, the annual taxes on a home worth $250,000 would be $1,325. In the city of Santa Fe, the total 2016 millage rate was just 24.58 mills.
Situated north of Bernalillo County and the city of Albuquerque, Sandoval County has the third highest property tax rates, on average, in New Mexico. The average effective property tax rate in Sandoval County is 0.94%.
The largest recipients of property tax dollars in the county are local school districts. For the 2018 tax year, roughly 40% of a municipality’s property taxes went to school districts, on average.
San Juan County
The fifth largest county in New Mexico by population, San Juan County is part of the “four corners” region where Colorado, Arizona, Utah and New Mexico all come together.
Property taxes in San Juan County are quite low. The county’s average effective property tax rate is just 0.64%, which is a bit more than half the national average.
Valencia County is located south of Albuquerque and has some of the lowest property tax rates in the greater Albuquerque area. The average effective property tax rate in Valencia County is 0.78%. Compare that to the rate in Bernalillo County (1.02%) and Sandoval County (0.94%).
Situated along the Arizona state border in western New Mexico, McKinley County has the highest property tax rates of any county in New Mexico by far. More specifically, it's the only county with an average effective property tax rate that is higher than the national average. The effective rate in the county is 1.61%. In Gallup, the county’s largest city, the total mill rate in 2018 was 33.165.
The median property tax paid by homeowners in Lea County is just $553 per year. That is less than half of the state median, and around one-quarter of the national median. Part of the reason taxes are so low is that the tax base is also relatively low. The median home value in Lea County is $118,500, meaning the average effective rate is just 0.47%, which is the seventh lowest rate in New Mexico.
Chaves County is a largely rural county in southeast New Mexico. The largest city is Roswell. In 2018, the total mill rate in Roswell was 22.834 mills. Of that, about 7.8 mills went to school districts, 7.3 went to the municipal government and 5.4 mills went to the county government. The average effective rate here is 0.68%.
Situated along the Texas border in southern New Mexico, Otero County has property tax rates that are well below the state average. The county’s average effective rate is just 0.60%. That rate is also far lower than neighboring El Paso County, Texas, where the rate is 2.22%.
Property Tax: Which Counties are Getting the Best Bang for Their Buck
SmartAsset’s interactive map highlights the places across the country where property tax dollars are being spent most effectively. Zoom between states and the national map to see the counties getting the biggest bang for their property tax buck.
Our study aims to find the places in the United States where people are getting the most for their property tax dollars. To do this we looked at school rankings, crime rates and property taxes for every county.
As a way to measure the quality of schools, we analyzed the math and reading/language arts proficiencies for every school district in the country. We created an average score for each district by looking at the scores for every school in that district, weighting it to account for the number of students in each school. Within each state, we assigned every county a score between 1 and 10 (with 10 being the best) based on the average scores of the districts in each county.
For each county, we calculated the violent and property crimes per 100,000 residents.
Using the school and crime numbers, we calculated a community score. This is the ratio of the school rank to the combined crime rate per 100,000 residents.
We used the number of households, median home value and average property tax rate to calculate a per capita property tax collected for each county.
Finally, we calculated a tax value by creating a ratio of the community score to the per capita property tax paid. This shows us the counties in the country where people are getting the most bang for their buck, or where their property tax dollars are going the furthest.
Sources: US Census Bureau 2017 American Community Survey, Department of Education, Federal Bureau of Investigation, State Police or Justice Department websites