Purchasing land in New Hampshire can be a great investment, but it's important to consider several factors before making a decision. Here are a few things to keep in mind when buying land in the Granite State.
Zoning and Land Use
Before purchasing land, research the zoning laws and land use regulations of the area where the land is located. It's important to know if the land can be used for the purpose you have in mind, whether it's building a house, starting a business, or farming.
Utilities and Infrastructure
Investigate whether the land has access to electricity, water, and sewage, and if not, what the cost of connecting to them and/or building private systems would be. Also, it's important to know what type of road access the land has and whether there are plans for future developments.
Consider the topography of the land, its soil quality, flood zones and any potential wetlands. This can have a big impact on the cost of permitting and development and the ability to build on the land. A realtor who is experienced in selling land can help guide you to the best resources for information and connect you with the relevant specialists.
Research the local property taxes for the land, as well as any additional assessments or special taxes that may apply. Also, take into account if the taxes are likely to increase in the future, as this can have a big impact on the long-term affordability of the land.
Current Use Tax
In an effort to provide healthy and attractive outdoor space, the State of New Hampshire declared that it was in the best interest of the public to encourage the preservation of open space. This was done in 1973 through the Current Use program, RSA 79-A.
When land comes out of the Current Use Program, there is a Use Change Tax that is owed. To calculate this tax, the full and true value of the land will be assessed by the municipality its located in, on the date that the land no longer qualifies for current use due to size, or the date a physical change takes place (such as the start of construction to build a house). This is important for buyers to know as it can impact the amount of money owed when purchasing land in Current Use.
For the State of New Hampshire Current Use Guide, visit the NH Department of Revenue Administration.
When purchasing land, it's important to be aware of any easements on the property. Easements allow another person/entity access to your property in a designated area. Easements can come in many forms, including but not limited to, driveways, pathways, power lines, utilities, rights of way, drainage, etc. You will want to have an attorney review and provide you with a detailed explanation of where the easements are located, how and when they can be accessed and any restrictions it may cause on your property.
Building Costs and Financing
It’s important to have a general understanding of current building costs in the area. Experienced contractors will be able to guide you on what to expect for per square foot costs, timelines and process. Costs can fluctuate greatly depending on who you hire as well as material costs. Once you have an understanding of costs, you’ll want to connect with a mortgage lender to discuss financing options for land and construction loans.
Understand the current market conditions in the area where the land is located and whether prices are rising or falling. Important information to review include recent land and home sales. A local real estate agent will be able to help you understand how the land will be valued.
Buying land can be a complex process, and it's essential to do your research and take the time to understand the factors that can affect the value of the land, and how they align with your long-term goals.
It's always a good idea to work with a real estate agent that is familiar with the area and can help you make an informed decision whether to buy or not. They can also connect you with the legal resources and other industry professionals such as surveyors, so you have the best information to guide your decision.