Anyone residing in a high tax state, but having a second residence in NH, should consider making NH their principal residence when their circumstances permit the transition. In our case, the state tax savings by transitioning our principal residence to NH after I retired more than offset the carrying costs of our NH home. We kept our other state residence as a vacation home for Winter and family visits with our kids and grandchildren who still live there. To make it work from a tax perspective, we spend more time in NH than in our other state and use healthcare and other professionals mostly located in NH, which are among the factors analyzed by the tax authorities in our other state. Of course, you should check the tax laws of your own state to determine what you need to do for a successful transition. To bring this back on topic, the potential tax savings from a transition to NH residency at some point might facilitate one or more in the next generation to take over ownership of our NH lake home, which we love and hope will be available to future generations.
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