Overview of New Mexico Taxes
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 $1,115, about $1,000 less than the national median. The state’s average effective property tax rate is 0.70%, which ranks as the 11th lowest of any state.
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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 Tax
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 $1,115, about $1,000 less than the national median. Likewise, the state’s average effective property tax rate is 0.70%, which ranks as the 11th lowest of any state.
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. Read on to learn more about that and other key New Mexico property tax rules.
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.
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 is calculated annually by an assessor in each county. Taxes in one year are based on the prior year’s market value, so your 2016 taxes will be based on the 2015 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 2015 market value was $180,000, your 2016 taxable value will be $60,000, less 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.
Another way in which New Mexico property taxes are limited is through the valuation cap. The valuation cap limits annual increases in appraised value to 3%. Thus, if your home value in 2015 was $200,000, it can be no more than $206,000 in 2016. 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.
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|
The largest New Mexico county by population, Bernalillo also has among the highest property tax rates. The county’s average effective property tax rate is 0.93%, second highest in the state.
In Albuquerque, which is the largest city in both the county and the state, the total 2014 mill rate was 41.611 mills for residential property. Of that, about 10.5 mills went to school districts, 11.47 mills went to the city government, and 8.5 mills went to the county. A tax supporting the University of New Mexico Hospital was responsible for 6.3 mills.
Doña Ana County
Southern New Mexico’s has property taxes that are slightly lower than the state average. The median annual property tax payment in the county is $908. That is $200 less than the state median, and $1,200 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 29.269 mills in 2014, far lower than the mill rate in the state’s largest city, Albuquerque.
Santa Fe County
Looking for low property taxes in New Mexico? Santa Fe County may be a good choice. The county’s average effective property tax rate is just 0.47%, which ranks as the eighth lowest in the state. At that rate, the annual taxes on a home worth $250,000 would be $1,175. In the city of Santa Fe, the total 2014 millage rate was just 23.363 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 0.86%.
Local school districts are among the largest recipients of property tax dollars. However, the largest school district in Sandoval County, Rio Rancho Public Schools, has underperformed in recent years. For the 2010-11 and 2011-12 school years, the Rio Ranch School District was assessed by the state as needing corrective action to improve test scores and other metrics.
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 0.51%, less than half the national average.
Valencia County is located south of Albuquerque, and has among the lowest property tax rates of any county in the greater Albuquerque area. The average effective property tax rate in Valencia County is 0.66%. Compare that to the rate in Bernalillo County (0.93%) and Sandoval County (0.86%).
Situated along the Arizona state border in western New Mexico, McKinley County has the highest property tax rates of any county in New Mexico. It is the only county with an average effective property tax rate that is higher than the national average, with an average rate of 1.32%. In Gallup, the county’s largest city, the total 2014 mill rate was 33.322.
The median property tax paid by homeowners in Lea County is just $470 per year. That is less than half of the state median, and less than one-quarter the national median. Part of the reason taxes is so low is that the tax base is also relatively low: the median home value in Lea County is just $97,200. However, the county also has the 11th lowest tax rates in New Mexico, on average.
Chaves County is a largely rural county in southeast New Mexico. The largest city is Roswell. In 2014, the total mill rate in Roswell was 25.081 mills. Of that, about 7.9 mills went to school districts, 7.4 went to the municipal government and 6.5 mills went to the county government. (A mill is equal to $1 in tax for every $1,000 in assessed value.)
Situated along the Texas border in southern New Mexico, Otero County has property tax rates slightly below the state average. The county’s average effective rate is 0.60%, which ranks as the 11th highest in the state. That is far lower, however, than nearby El Paso County, Texas, where the rate is 2.09%.
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 calculated the average math and reading/language arts proficiencies for all the school districts in the country. Within each state, these schools were then ranked between 1 and 10 (with 10 being the best) based on those average scores.
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 2016 American Community Survey, Department of Education, Federal Bureau of Investigation, State Police or Justice Department websites