Welcome to 2024! As you may be aware, the Maine Legislature ended the Property Tax Stabilization program in 2023 due to the unanticipated expense of the program. This means that your tax bill in 2024 will no longer be stabilized at the amount paid in 2022 and will instead be based on the current valuation of your property. Unfortunately, I am unable to estimate your 2024 taxes at this time, because the budget has not been completed and 2024 property valuations have not been committed. We'll have more information available in the summer regarding 2024 taxes.
This newsletter is designed to introduce you to the two programs that were expanded by the legislature when Property Tax Stabilization was repealed. The Property Tax Fairness Credit and the Property Tax Deferral loan program are two other programs designed to help residents with high property taxes. This e-newsletter briefly describes these two programs and explains how you can find additional information on these alternatives. The headline in each section is also a link to a PDF of a flyer about the program that you can download, print and share with others if you wish.
If you routinely file a Maine Income Tax return, you may be familiar with the Property Tax Fairness Credit. This program uses the income tax process to provide a refund of a portion of property taxes paid on your property. The Property Tax Fairness Credit is a reimbursable credit, so even if you do not owe any Maine income taxes, you can still file a Maine income tax return solely to receive this refund.
To be eligible for the credit, your property taxes must be more than 4% of your total income (including untaxed income such as social security). The maximum refund that can be received has been increased to $1,500 for those aged 65 and older and will be increased to $2,000 next year. If you or your spouse is a veteran rated as 100% disabled, you may be eligible for a credit of up to $3,000.
There are income limits to the program that vary according to your family size. In most cases, your income must be under $57,500 (single) or $75,000 (married), though if you have dependents, the maximum income increases to $92,500. These income eligibility amounts change each year, so it is always worth checking to see if you qualify for the program.
For more information on the Property Tax Fairness Credit, check out Maine Revenue Services. Maine Revenue Services will help with your application, or you can visit one of the free tax preparation services in Bath. These programs have IRS-certified volunteers who can help you fill out the forms for the Property Tax Fairness Credit. Remember, you can apply for this refund even if you don't owe anything in income taxes.
AARP Tax-Aide | CA$H Maine |
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The Property Tax Deferral program is a loan program that allows those age 65 or older or who are permanently disabled to defer payment of the annual property taxes on their primary residence. The program seeks to protect those on fixed incomes from being forced from their homes by increasing property valuations. In 2023, the Legislature doubled the income limits for the program, and increased the asset limits.
To qualify for Property Tax Deferral, the total income of all property owners must be less than $80,000, and you must have liquid assets of less than $100,000 if single and $150,000 if married. Liquid assets do not include your house, your car, or qualified retirement accounts such as an IRA or 401(k).
The deferred property taxes are paid by the State of Maine, and the amount owed, along with interest, is rolled into a loan that must be repaid if you move away (unless you move for health reasons), or when the property is sold or becomes part of an estate. Typically, you or your estate have 12 months to repay the loan (extensions can be granted). However, your surviving spouse may continue to defer the property taxes already included in the program, even if he or she is not yet eligible for property tax deferral at the time of your death (meaning, the loan does not have to be repaid in 12 months if your spouse inherits your home). You may make payments on the loan to reduce the liability to your heirs at any time, and you can also withdraw from the program at any time.
This feature means the deferral program could have a similar effect to Property Tax Stabilization, where a homeowner can set their property taxes to a stabilized, affordable amount each year, while deferring the payment of any annual increases in property taxes.
There is a one-time application for the Property Tax Deferral program, which must be submitted to the Bath Assessor’s office between January 1 and April 1. The assessor verifies information regarding your residence and then forwards your application to Maine Revenue Services. Maine Revenue Services determines eligibility for the Property Tax Deferral program. Once you are found eligible, you remain eligible regardless of future income or asset changes.
This is a complicated program, with a number of pros and cons. If you are considering it, I urge you to review the Maine Revenue Services' Frequently Asked Questions and the 2024 Guide for Applicants, which were my sources for the (printable) flyer I created, linked at the headline to this section.
More contact information for Maine Revenue Services is below. Both the Property Tax Fairness Credit and the Property Tax Deferral loan program are managed by the State of Maine, and Maine Revenue Services is the best source for answers to any questions about the specifics of each of these programs.
Email: income.tax@maine.gov
Phone: (207) 626-8475
Mail: PO Box 1060, Augusta, ME 04332-1060
Email: prop.tax@maine.gov
Phone: (207) 624-5600
Mail: PO Box 9106, Augusta, ME 04332-9106
My best wishes to you for a happy and healthy 2024!
Brenda Cummings, City Assessor