When spring arrives, one of the first things to land in your mailbox is the property tax bill.

For those looking to buy a home in New Haven or those who already live here but don't fully understand the tax structure, today we'll break down the city's property tax and budget structure. Honestly, when I first received it, I was confused too. But once you understand it, it's not that difficult.

In the U.S., especially in Connecticut, property taxes are calculated using a unit called the Mill Rate. A Mill Rate of 1 means a tax of $1 for every $1,000 of assessed value. As of 2024, New Haven's Mill Rate is 38.68.

This is an increase of 1.48 from the previous year's rate of 37.20 for the 2023-24 fiscal year. Let's do a simple calculation. If the assessed value of my home in Connecticut is $200,000, the annual property tax would be 200 × 38.68 = $7,736. Whether this is a lot or a little depends on the home value and the level of local services, but it's important to know that Connecticut is generally considered a state with high property taxes.

The budget for the City of New Haven for the 2024-25 fiscal year has been set at a total of $680.4 million. This is an increase of 2.66% from the previous year's budget, which amounts to an increase of $17.7 million. The education sector stands out in this budget. An additional $5 million has been allocated to New Haven Public Schools, along with $4 million in state government funding. The main uses for this funding include hiring and retaining teachers, supporting student learning, and expanding career-connected education programs. This can be seen as a sign that New Haven is actively investing in public education.

There is one interesting and complex fact. 56.79% of all properties in New Haven are tax-exempt. This is largely due to the presence of properties owned by Yale University, hospitals, and non-profit organizations, which do not pay property taxes, resulting in a relatively higher burden on the taxpayers who do pay taxes.

This issue has been a long-standing debate in New Haven. How much has the tax burden increased? According to estimates based on the 2023-24 budget, single-family homes have seen an average tax increase of $500, two-family homes $851, three-family homes $943, and four-family homes $1,347.

The type of home you live in has a quite specific impact on taxes. It's wise to understand this tax structure beforehand when making decisions about buying or renting property.