Property values have increased faster than the cost of living.

The current system of property taxes is predicated on market value. The assumption is that if one owns a property of value, he or she has the ability to pay a realty tax based on current market conditions. I believe this not to be true.

Many Maine residents have owned their homes for years, some for decades. During their years of ownership, countless residents have seen the value of their homes increase dramatically. The actual dollar amount of their increase is not realized until the sale of the property occurs.

As property values have increased and as reassessments are performed, property owners have incurred increases in property taxes that have been disproportionate to cost of living adjustments and income. Recent reassessments in Lewiston and Auburn doubled or tripled some property taxes. This significant increase may force many property owners, especially those on fixed incomes, to sell their homes.

It is unconscionable for a Maine resident who has lived in his or her home for years to be forced to sell due to increased property taxes that are disproportionate with their ability to pay.

If an individual purchases a stock at $10 per share and it increases in value to $100, that individual is not required to pay a tax on the $90 increase until the stock is sold. Likewise, if one buys a home for $100,000 and it is revalued at $200,000, that individual should not have to pay increased property tax based on the revalued amount until the property has been sold.

I propose the following outline for what I believe to be true property tax reform:

• Property taxes should be capped at the 2004 or 2005 rate.

• Property taxes could increase yearly at no more than the cost of living or the consumer price index.

• New owners would purchase property with the understanding they would be paying taxes based on an increased assessment. Their future taxes would be based on the tax assessment at the time of their purchase, plus the cost of living index. A reasonable assumption is if they can afford the price, they can afford the costs of upkeep of the home based on that price.

• In return for this guarantee of property tax stability, municipalities would receive an assessment on the increased value or profit of a property at the time of the sale. The cost basis would be the original cost of the property plus improvements. The sale basis would be the sale price minus any costs of the sale, such as brokerage commissions and other related costs.

Under this proposal, municipalities would not lose current tax revenue. There would be increased revenue as more property is developed. The municipality would be assured of increased revenue to meet future needs.

Taxpayers would be able to assess their future tax liability. Under the current system, a resident could be forced to sell their property if a reassessment indicates the value of their property has increased significantly.

This proposal would minimize the fear of long-term residents, especially those on a fixed income, of losing their homes because of increased property taxes that are based on theoretical values.

If we are to have real tax reform, the political aspect must be minimized. We must have new and creative ideas.

Stanley L. Tetenman lives in Poland.