REGION — Maine state lawmakers have effectively done away with the Property Tax Stabilization Program for Seniors by voting to fund it only for the current tax year that began April 1, 2023.
The program was passed last year as LD 290 with the purpose of providing property tax relief to seniors over the age of 65. Under its provisions, senior citizens who had claimed homestead exemptions on their current homes for at least 10 years were eligible to apply.
To participate residents were required to renew their application every year before Dec. 1. However, the program had no income limits, and seniors could carry their frozen tax bill amount to any future residence regardless of size or location, creating a loophole that benefited Mainers who would not normally qualify for tax relief. The program also relied on municipalities to administer the program.
An estimated 100,000 applications were submitted by the deadline last year, a bureaucratic burden to local tax clerks. Gov. Janet Mills’ biannual budget included $46 million to fund the program its first two years but with so many Mainers applying and no guarantee the state would continue to reimburse municipalities for lost revenue beyond that period it became viewed as unsustainable.
Early this year several lawmakers looked toward alternative relief programs including Sen. Rick Bennett of Oxford, whose proposed bill LD 130 would have replaced LD 290 with a new tax relief program that would have tripped the homestead exemption to $75,000 for seniors 65 and older. LD 130 received support from other lawmakers but did not make it beyond the state’s committee on taxation.
Two programs are being offered to Maine seniors in need of relief.
One is the State Property Tax Deferral program, a loan which covers property tax bills for people 65 and older or are permanently disabled and unable to pay. The municipality is paid with the loan. The loan balance is deferred until the property is sold or becomes part of an estate.
To qualify for the tax deferral program this year, a homeowner must have less than $50,000 in liquid assets (or $75,000 for couples) and an income of less than $40,000. After January 1, 2024, applicants liquid assets are capped at $100,000 (or $150,000 for couples) and income of less than $80,000.
Participation requires a one-time application, which results in Maine Revenue Services maintaining a lien on the property. Residents can leave the program but will then be responsible for repaying the loan with interest.
There are also applicable criteria relating to acreage and mulit-unit homes.
The second alternative is Property Tax Fairness Credit Summary, which allows a tax return credit on property taxes or rent paid. Eligibility is determined by residency criteria and tax/rent payments. Certain income and paid tax/rent limitations, and tax filing statuses apply.
Eligibility year-to-year for the Property Tax Fairness Credit Summary is determined by Tax Schedule PTFC/STFC.
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