Property Tax in Albuquerque & Rio Rancho and How It Is Calculated
Property taxes in New Mexico are ranked among the three lowest states in the country.
Who Manages Property Taxes?
The Treasurer’s Office is the property tax collector for the County of Bernalillo (Albuquerque’s county). The property taxes are distributed to Albuquerque Public Schools, Central New Mexico Community College, the City of Albuquerque, Middle Rio Grande Conservancy District, State of New Mexico, University of New Mexico, and other taxing entities within Bernalillo County. The County Assessor sets the assessed property valuation and the County Commission sets the tax rate for the county. Other tax rates are set by the individual taxing entities with final approval by the State’s Department of Finance and Administration.
In Sandoval county (Rio Rancho and other cities), the Sandoval Country Assessor’s office appraises properties. Proceeds are distributed to the county, State government debt service bonds, school districts, UNM Hospital, cities in municipal areas and other agencies.
How Is The Taxable Value Calculated?
The assessor sets a Total Assessed Value for a property. This is based on the sale of that property, or similar properties, in the past year. The Total Assessed Value is then divided by 3 to get the Taxable Value. Certain exemptions are then subtracted from the Taxable Value to get the Net Taxable Value. The prevailing tax rate ($x per $1000 of value) is then applied to the Net Taxable Value. The prevailing tax rate varies by locatoin and over time.
Exemptions
The exemptions and their values are as follows:
- Head of Household – $2000
- Veterans’ exemption – $4000 (a disabled veteran is 100% exempt from property taxation)
Tax Breaks for the Disabled and People Over 65
People 65 or older and those who the state deems to be 100% disabled, with household incomes below $32,000 per year may be eligible for a “freeze”, or valuation limitation. This would mean that the assessed value of their home could not be raised. A changing tax rate would still apply, however, and so their taxes could still go up, but the Net Taxable Value on the home would not increase. Disabled persons must apply to the state to see if they can be considered 100% disabled. An application to the County Assessor’s office is required every year to maintain a freeze.
Example
- The Assessor sets Total Assessed Value for a home at $210,000.
- That is divided by 3 to get a Taxable Value of $70,000.
- Let’s say the owner is a veteran who has claimed the Veteran’s exemption. Subtract $4000 from $70,000.
- The Net Taxable Value is $66,000.
- The prevailing tax rate is then applied to that amount. Let’s say that the tax rate in this home’s area is $30 per $1000 of Net Taxable Value. Therefore, the annual property tax for the property in this example would be around $1980.
Please note that the tax rate varies by area.
Limited Tax Increases
Although tax rates change over time, it is good to know that the Total Assessed Value is not allowed to increase by more than 3% per year, even if the market value increased by more than that. However, this only applies to properties that were not sold that year. If a property is sold and the sales price is much higher than the old assessed value, that property can be re-assessed at the sales price.
Estimating Property Tax For A Home
When considering purchasing a home, a reasonable rule of thumb to use is to estimate property taxes at 1.2% to 1.35% of the price of the home. Tax rates vary by tax district. But this rule of thumb should put you pretty close.