Property Tax Breaks in New Mexico

Property taxes in New Mexico are assessed by local governments and rates vary considerably across the state depending on the location and the type of property. The taxable value of residential property is one third of the assessed value and there are exemptions for heads of families and veterans.

Property tax valuation increases are capped at 3% annually, except when the property changes hands. This has resulted in what is called “tax lightning” when homebuyers face taxes up to two or three times higher.

As indicated by New Mexico State Senator Tim Eichenberg, as of March 2011 there have been three state court rulings declaring the law unconstitutional since it creates a separate class of homeowners for tax purposes. A bill to extend the 3% cap to all residential property, even if it is sold, and to create a ratio to value new construction at the level of other homes in the county was being considered in the state legislature.

The head of family exemption is $2,000 of the net taxable value of the property. One exemption per family is allowed and it can only be applied on one residence. New Mexico residents who are single, married, or widow(er)s, and heads of household who provide more than half the cost of a related person can claim the exemption.

You only need to apply for the exemption once and you will continue to receive it in subsequent years. You should apply for the exemption at your county tax assessor’s office. You can find information on county assessors on the County Maps page of the New Mexico Taxation and Revenue Department website.

Veterans in New Mexico qualify for a property tax exemption up to $4,000. According to the New Mexico Veterans’ Service Commission, veterans who served a minimum of 90 days consecutive active duty, have an honorable discharge, and are legal residents of New Mexico qualify for this exemption on their primary residence. You can download the application for certificate from their website.

Veterans who have a 100% service-connected disability qualify for a complete waiver of property taxes on their primary residence. There is a separate application for this waiver. The certificates from the New Mexico Veterans’ Service Commission should be presented to the local tax assessor.

Homeowners who are 65 or older or disabled can qualify for a property value freeze to protect them from future property tax increases if their modified annual gross income is not more than $32,000. You should apply for this exemption at your county tax assessor’s office. You may be able to download the application form from the county assessor’s website. You will need to show verification of your income.

According to the Database of State Incentives for Renewables & Efficiency, if you install a solar energy system at your home, the cost of the system will not increase the value of your property for tax purposes. This includes solar water heating, solar space heating and solar photovoltaic systems. If the property is later sold, the value of the solar energy system would be added to the assessment at that time.

Sources:

Application for Certificate of Eligibility for Veterans’ Tax Exemption, New Mexico Veterans’ Service Commission

Assessor Handbook, Bernalillo County

County Maps, New Mexico Taxation and Revenue Department

Disabled Veteran Property Tax Waiver, New Mexico Veterans’ Service Commission

House Should Vote to Ground Tax Lightning, Tim Eichenberg, New Mexico State Senator

Property Tax Exemption for Solar Systems, Database of State Incentives for Renewables & Efficiency

State Benefits, New Mexico Veterans’ Service Commission