Maine Seniors: Property Tax Increases May Be A Thing Of The Past
U.S. housing prices are up substantially over the past two years, and that’s been felt keenly here in Maine. One effect of this increase has been re-assessments of properties by municipalities and resulting tax increases. These increases can be particularly hard on senior citizens whose incomes may not see adjustments adequate to pay the increased taxes.
A new law, going into effect this month, aims to stem these increases for Maine seniors. Its title pretty much describes it: “LD 290, An Act To Stabilize Property Taxes for Individuals 65 Years of Age or Older Who Own a Homestead for at Least 10 Years.”
Simply put, Mainers over 65 years of age are eligible to have their property taxes ‘frozen’ at where they are currently, without being subject to future increases. Importantly, however, there are some basic requirements:
Eligible Individual: For a household to qualify, an individual must be age 65 and a ‘Permanent Resident’ of the state of Maine. This essentially means that Maine is the state they call home, so it won’t apply to people who only live in Maine part of the year and are actually residents of another state. Only one owner needs to be 65 to be eligible.
Eligible Homestead: The homeowner must have owned a home in Maine for at least 10 years (not necessarily consecutively) and otherwise be eligible for Maine’s ‘Homestead Exemption’. The homestead can change from one property to another within the state of Maine, so eligibility is not lost when you change homes.
Notably, there is not an income limit, nor is there a limit on the value of the home.
YOU MUST APPLY EACH YEAR
Unlike the Homestead Exemption, this property tax stabilization requires the homeowner to apply annually for a continuation. If the property owner does not, they are no longer protected from any increases that may have occurred over the years. The property owner may re-apply, but will be stabilized at the new rate.
This new law isn’t exempt from criticism. While municipalities are reimbursed by the state for the lost revenue that comes with stabilizing property taxes, these towns will shoulder the administrative burden of handling applications each year (and potentially dealing with testy taxpayers who miss an application deadline and see their taxes shoot up as a result). Further criticism has been levied at the fact that there are no income or property value limitations. A billionaire living in a mansion has the same access to property tax stabilization as someone with modest means.
Still, this is a program that will provide an opportunity for Maine’s seniors to plan and budget much more easily. Property taxes can be a substantial expense for retirees, and the ability to control these is an important planning tool which should be utilized. If you have questions or want assistance in accessing this stabilization, reach out to your PFA advisor, or contact your own town or city’s administrative office, and say ‘farewell’ to future property tax increases!