LD 290 Property Tax Stabilization for Senior Citizens

The LD 290 “Property Tax Stabilization for Senior Citizens” program, enacted in August 2022 was repealed by the Maine Legislature on July 6, 2023, with an effective date of October 11, 2023.  The program had allowed Maine seniors 65 and older who owned a permanent residence for at least 10 years and were receiving (or eligible for) a homestead exemption, to freeze taxes at the previous year’s level regrardless of income.

The repeal of this program means there will be no reapplication process and no need to follow-up with Assessing department in late August/early September, as previously thought.  Although the program has been repealed, a qualifying resident’s initial application will still be administered this year for the upcoming Tax Commitment in July 2023.  As a result, a significant number of your residents will only be responsible for the “frozen” property tax bill amount for the 2023 – 2024 billing cycle – this amount will be equal to the tax amount the owner was billed in the 2022-2023, unless their new billed amount would be lower, in which case they’d owe the lower of the two amounts.  Per the law, the State will reimburse your Town for 100% of the difference between actual and frozen taxes.

It is important to note that these are State programs and while the Town plays a role in the administration of them, the Town is not responsible for the policy objectives of these initiatives.  Any questions or concerns owners have regarding this program should be directed to your legislative representative.  To find your representitive, please visit:  https://legislature.maine.gov/senate/

To help lower-income seniors avoid higher property taxes and remain in their homes, two existing State programs are being expanded:

1. The Property Tax Fairness Credit, which currently allows eligible Mainers to take a $1,500 credit, has increased to $2,000; it also loosens limits on the program in a way that allows the benefits to remain constant for a Mainer whose spouse passes away.  Lastly, the income limit may increase.  Note:  This program is NOT administered by cities or towns; to claim the credit, a resident must file Form 1040ME and Schedule PTFC/STFC for the tax year during which the property tax or rent was paid.  The page has not been updated with new income limits or benefit amounts to reflect the revised legislation.
   For help, call 207-624-9784.  For more info visit:  Property Tax Fairness Credit Summary on https://www.maine.gov/revenue
2. The State Property Tax Deferral Program, a lifeline loan program that covers the annual property tax bills of Maine seniors age 65 and older who cannot afford to pay them on their own, has been expanded.  It doubles the income limit on that program to $80,000 and also raises asset limits.  Taxes must be paid back when the home is sold or becomes part of an estate.  Note:  This program is administered by the State; however, applications must be filed with the Assessor’s Office between January 1 and April 1 each year.  Applications are forwarded to Maine Revenue Services who review and make the dertermination for acceptance and approval.  If your community receives payments from the State electronically, you can look for this payment to be made through Paymode.
   Questions can be referred to Maine Revenue Services, Property Tax division, at 207-624-5600 or email at prop.tax@maine.gov  For more info, visit:  State Property Tax Deferral Program on https://www.maine.gov/revenue

   Q: What’s happening with the Stabilization law?
   A:  The Legislature has repealed and replaced it.  It will remain in effect for just this one tax year.  So, if you applied last year, you’ll get the benift of the “FREEZE” on this years taxes.  Since the program has ended, there is no re-application.
   Q:  Why did it get repealed/replaced?
   A:  The State realized that the Stabilization law disproportionately favored the wealthy and the cost of the program would balloon out of control.
   Q:  What is the new law?
   A:  It consists of an expanded Senior Property Tax Deferrel program and an expanded Property Tax Fairness Credit( instead of the freeze on property taxes ).  People can be enrolled in both.
   Q:  How does one apply for these programs?
   A:  There will be no application at Town Offices.  Instead, the application process will flow through Maine Revenue Services and is administered by the State.