Maine’s Property Tax Stabilization Program, the “Program,” took effect in August 2022. This Program is designed to freeze or stabilize an individual’s property tax on a homestead from year to year. The annual deadline to carry over the previous year’s tax amount is December 1, and an application must be submitted to the local municipality for review each year.
To qualify for the Program at least one joint owner must be:
- At least 65 years old;
- A permanent resident of Maine;
- Have owned a Maine homestead for at least 10 years, and
- Be eligible for a homestead exemption on the property being placed in the Program.
As long as an individual qualifies and files a timely application, the tax billed to a homestead will be frozen at the amount billed the prior tax year. If you miss a deadline, and apply the following year, then it will adjust to the year prior to the application. There is no income or asset requirement for the Program.
If more than one person owns the property as joint tenants, then only one owner needs to qualify. To check whether your property deed meets the requirement of joint tenancy, review the deed to see if the property was received as “joint tenants” or “tenants in common.” A tenancy in common deed does not qualify, but you could consult with our office to see if it is in your best interest to change the deed. If neither language is on the deed, then the presumption is that it is tenants in common.
A permanent resident is defined in Title 36, Sec. 681(4), which states, permanent residence “means that place where an individual has a true, fixed and permanent home and principal establishment to which the individual, whenever absent, has the intention of returning. An individual may have only one permanent residence at a time and, once a permanent residence is established, that residence is presumed to continue until circumstances indicate otherwise.”
The requirement to own a Maine homestead for at least 10 years, does not require that it was the same homestead nor that the years were consecutive. A homestead is residential property occupied as a permanent residence, including property in a revocable living trust for your benefit or a cooperative housing corporation if occupied as a permanent resident and as a qualifying shareholder. A current tax bill will reflect whether a home is currently qualified as a Maine homestead. Property in irrevocable trusts does not qualify.
The Program carries over to a subsequent year, even if you buy a new home and change municipalities. If you qualified while owning a first homestead, and then purchased a new homestead, a timely application will freeze the property to the value of the previous year on the previous property.
For municipalities, the law states that municipalities that have stabilized a tax bill may recover from the State, 100 percent of the amount by which the property tax assessed on the homestead exceeds the stabilized amount of property tax billed. The municipality must submit its claim by November 1 of the year in which the property tax was stabilized.
This is a new law, and some have voiced concerns about its sustainability. The Maine Municipal Association has cited concerns in the news about the burden on municipalities in terms of processing applications and cost. Under the Constitution, the State is only required to reimburse municipalities up to 50 percent of lost revenue, so some wonder whether full reimbursement from the state’s General Fund will be sustainable (Constitutional).
If you are a Maine homeowner who is at least 65 years old, then it is recommended that you do your own research on whether to submit an application to stabilize your property tax. Applications are available on the Maine Revenue Services website or from your local municipal office.
To learn more, see Maine Revenue Service’s Property Tax Stabilization Program.
To read the law’s text, visit Bill LD290, “An Act To Stabilize Property Taxes for Individuals 65 Years of Age Or Older Who Own A Homestead For At Least 10 Years”.