The short answer
Per the NH Department of Revenue Administration, the 2025 total tax rate was $18.16 per $1,000 of assessed value in Salem, $14.15 in Windham, and $18.99 in Derry. On a $750,000 assessment, that works out to $13,620 a year in Salem, $10,613 in Windham, and $14,243 in Derry, so Windham is the lowest of the three. NH has no income tax and no sales tax, so property tax is how every town pays for schools, roads, fire, and the library, and the rate is reset every fall.
How NH property tax actually works
NH property tax math is simple, and that is the good news. The bad news is that the numbers are bigger than most MA relocators expect.
The formula is the same in every town: mill rate times assessed value, divided by 1,000, equals your annual bill. A $500,000 assessment at a $20.00 mill rate is $10,000 a year. That is the whole bill, not just the school portion, because NH towns roll four separate lines into one rate: town operations, the local school, the state-education line, and the county. You see all four on your tax card, but you pay one number.
Bills are issued twice a year. The first bill in June or July is an estimate based on the prior year's rate. The second bill in November or December is the "settled" bill, where the town adjusts for the new rate the NH Department of Revenue Administration sets every fall. If the rate went up, you pay more in December. If it went down, you pay less. The rate is never locked for more than a year.
One more thing the calculator on Zillow does not tell you. Your assessed value is not your purchase price. Towns in NH assess on their own revaluation schedule, and in a rising market assessments can trail sale prices by a wide margin, especially in the years just before a revaluation. The NH Department of Revenue Administration measures that gap for every town each year as the equalization ratio, and it matters as much as the rate itself. More on that below.
Why the rate swings so much town to town
You drive from Windham to Derry and the 2025 rate climbs $4.84 per thousand, from $14.15 to $18.99. That is not a mistake. That is the NH funding model working exactly as designed.
NH has no income tax and no sales tax. That is the headline every relocator loves, and it is real. But the state still has to pay for public schools, and it has decided that most of that cost falls on the towns, through property tax. The rate is simple division: what the town, the school district, and the county need to raise, spread across the town's total assessed value. Per the NH DRA 2025 Municipal Tax Rates report, Windham raised about $75.0 million on roughly $5.28 billion of assessed value, Derry about $106.8 million on roughly $5.57 billion, and Salem about $121.5 million on roughly $6.62 billion.
Look at the pieces and the difference is mostly the town line, not the schools. Salem and Windham have the same 2025 local education rate, $10.07, and Derry's is $11.84. The municipal (town government) portion is where they split: $2.48 in Windham, $5.39 in Derry, and $5.90 in Salem. Derry also sends its high schoolers to Pinkerton Academy, a private academy with a public-tuition contract, and that tuition line shows up in Derry's school portion. One more factor: a town whose assessments trail the market shows a higher rate on paper than a town assessed closer to full value, which is why the equalization ratio below matters.
None of this is a criticism of any town. It is just the math, and it is why "NH is a low-tax state" deserves an asterisk the size of a front door.
Side by side, the three towns buyers compare most
Here is the 2025 picture for the three towns buyers compare most often, with annual tax bills at three common price points. These are based on 2025 rates published by the NH Department of Revenue Administration. Rates are set annually, so 2026 numbers will shift when the fall rate-setting cycle finishes.
Swipe sideways to see every column.
| Town | Rate per $1,000 | $500,000 | $750,000 | $1,000,000 |
|---|---|---|---|---|
| Windham | $14.15 | $7,075 | $10,613 | $14,150 |
| Salem | $18.16 | $9,080 | $13,620 | $18,160 |
| Derry | $18.99 | $9,495 | $14,243 | $18,990 |
Bill = assessed value / 1,000 x rate, rounded to the nearest dollar. Source: NH Department of Revenue Administration, 2025 Municipal Tax Rates.
Windham at $14.15: $7,075 on a $500K assessment, $10,613 on a $750K, $14,150 on a $1M. Salem at $18.16: $9,080 on a $500K, $13,620 on a $750K, $18,160 on a $1M. Derry at $18.99: $9,495 on a $500K, $14,243 on a $750K, $18,990 on a $1M. The math is assessed value divided by 1,000, times the rate, so $750,000 / 1,000 x $14.15 = $10,612.50 in Windham.
Read across one row. A buyer choosing between a $750,000 colonial in Windham and the same assessed value in Derry is looking at $3,630 a year less in Windham. Over ten years, that is $36,300 before any rate changes. That is a finished basement, a new roof, or two full years of college tuition. It is not a rounding error.
Read down one column. On the $1M line, Windham comes in $4,010 a year below Salem and $4,840 below Derry, while Salem and Derry sit only $830 apart. Most buyers I walk through this expect Windham to be the expensive one on taxes. On the 2025 numbers, it is the lowest of the three.
One caveat. These bills assume the town's assessed value matches the price you paid, which is rarely exactly true. Use the equalization section below to adjust.
Assessed value vs. what you paid
The sticker price is not what you are taxed on. The town's assessed value is.
Every NH town publishes an equalization ratio. It is the number the Department of Revenue Administration calculates to describe how close the town's assessments are to current market value. A ratio of 100 percent means the town is assessing at full market. A ratio of 80 percent means the town is assessing at 80 cents on the dollar, and your tax bill is lower than the sticker-price math would suggest.
Here is how it plays in practice. You buy a $750,000 colonial in Windham. The town's most recent assessed value on that property, from the last full revaluation, is $620,000. Your tax bill is calculated on the $620,000 figure, not the $750,000 you paid. At Windham's 2025 rate of $14.15, that is $8,773 a year, not $10,613.
That gap closes over time. NH law (RSA 75:8-a) requires a town to reappraise at least every five years, and most Southern NH towns are on a four or five year cycle. When the next revaluation hits, the assessor usually brings the number much closer to recent-sale prices, and your bill adjusts upward. Buyers who budget on the purchase-price math are usually over-budgeting in year one and right on the number by year three or four.
The town assessor's office posts every property's current assessed value online. Look it up before you write an offer. It is the single best ten-minute due-diligence step most buyers skip.
Elderly, veteran, and other exemptions
NH gives real exemptions for seniors, veterans, and a handful of other categories. They reduce your assessed value directly, so the dollar savings scale with the mill rate. The bigger your town's rate, the more the exemption is worth.
Elderly exemption. Every town sets its own amounts and limits under RSA 72:39-a. Per the Salem assessing office, a qualifying Salem homeowner age 65 to 74 gets $156,000 off assessed value, 75 to 79 gets $234,000 off, and 80-plus gets $318,500 off. To qualify for the 2026 application year, income from all sources must be at or under $47,560 single or $63,800 married, and assets other than the home at or under $162,400. Windham and Derry run their own tier structures with different dollar amounts, so check each town's assessing page. In Salem, the 80-plus exemption at the 2025 rate of $18.16 takes about $5,784 a year off the bill ($318,500 / 1,000 x $18.16). That is the kind of number that changes a downsizing decision.
Veteran credit. NH veterans' tax credits come off the tax bill itself, not the assessed value. Each town votes its own amount within the range state law allows (RSA 72:28), and a veteran with a total and permanent service-connected disability qualifies for a larger credit under RSA 72:35. Surviving spouses can qualify too. The town assessing office lists the current amounts.
Other categories. Blind exemption, deaf or hearing-impaired exemption, and solar/wind/wood-heating exemptions exist in most towns. The dollar values are smaller than the elderly or veteran credits but they stack.
You apply at the town's assessing office by April 15 for the current tax year. The application is simple, the paperwork requirements are not, and the return on the hour it takes to fill out is often thousands of dollars a year. If you are buying into a town and you qualify, file the day you close.
If you are 65 or older and weighing Salem against Derry for a single-level condo or a smaller home, run the exemption math both ways before you decide. Each town sets its own elderly exemption amounts and income limits, so the exemption can move the bill as much as the rate does. The only way to know is the actual math on the actual house.
What buyers get wrong
The most common mistake I see on the buyer side is assuming the purchase price and the assessed value are the same number. They almost never are, and that mistake usually runs in the buyer's favor for the first year or two of ownership. Use the town's current assessed value to budget year one, then assume a revaluation jump within three or four years.
The second mistake is comparing NH to MA on the rate alone. NH's rates look enormous next to MA's. The FY2026 residential rates in the Massachusetts towns I cover run from $8.64 per thousand in Lawrence to $13.27 in Chelmsford, per the MA Division of Local Services. But MA also has a state income tax of 5 percent, a sales tax of 6.25 percent, and a 4 percent surtax on taxable income above an indexed threshold ($1,107,750 for tax year 2026, per the Massachusetts DOR). A MA-to-NH relocator who does the full tax picture, not just the property line, almost always comes out ahead in NH. For the full math on that, the moving from Massachusetts to Southern NH honest guide breaks it down on a real household budget, and the MA vs NH calculator on the relocation page runs your own income and home value side by side.
The third mistake is thinking the NH tax advantage holds when you still work in MA. It does not. The commuter tax trap explains why MA will still tax your wages if you cross the border for work, and what to do about it.
When to appeal an assessment
If the town's assessment looks high compared to recent sales of similar homes on your street, you can appeal. Under RSA 76:16, you file an abatement request with the town by March 1 following the notice of tax (the final bill of the tax year). The process is not mysterious, but it does reward homeowners who bring evidence.
The evidence that wins an appeal is a pile of recent comparable sales, usually three to five, that sold for less than your assessment implies your home is worth. The town's assessor is looking at the same MLS data, but they are looking at it through a mass-appraisal model, not a property-by-property review. If your home has a feature the model cannot see, a wet basement, a failing septic, a weird lot shape, an aging roof, that is your opening.
You can pull comps yourself from the town's assessing office or ask an agent who knows the street. I do abatement-comp pulls for past clients on request, the same comp work I run for buyers before an offer. If the numbers support an appeal, you file. If they do not, I tell you so, and you save the filing fee.
A successful appeal saves you money every year going forward, not just this year. On a Derry home where the assessment drops by $50,000, that is about $950 a year back in your pocket at the 2025 rate ($50,000 / 1,000 x $18.99), every year, until the next revaluation. Worth an afternoon.
To run your own number, use the property tax calculator. For the town-by-town picture, the Salem, Windham, and Derry guides each carry the current rate, commute, and school details. Every rate in this article comes from the NH DRA 2025 Municipal Tax Rates report, and I update it when the 2026 rates are certified this fall.
