Homeownership is the entry point to the middle class and secures long term wealth. For many people, it provides a path towards retirement. One barrier to homeownership is a high property tax bill. Property taxes are the most regressive form of taxation.
Mainers need property tax relief, especially for seniors on fixed income and families working hard to get by.
When I was the Ranking Democrat on the Taxation Committee, I led the charge to increase the Homestead Exemption Program in 2017 and the Property Tax Fairness Credit in 2018.
This year, this past legislative session, we built on that success.
Under Democractic leadership, lawmakers crafted and passed a strong, bipartisan budget that provides $130 million in property tax relief for hardworking Mainers, seniors, families and small businesses. We expanded the Property Tax Fairness Credit to provide relief to an additional 13,000 Mainers that didn’t qualify before. Seniors can save up to $1,200 in property taxes and eligible working Mainers and families can save up to $750 on property taxes or rent.
We increased the Homestead Exemption to $25,000, a $5,000 increase from the previous year. This means Maine homeowners can take $25,000 off the value of their home when calculating their property tax bill.
We began restoring the promise the state made to municipalities for revenue sharing. This is the share of income and sales tax the state sends back to municipalities to help stabilize property tax rates and fund essential services like fire and police.
The more resources the state sends back to local communities, the less local governments have to make of the difference between significant cuts and increasing mill rates.
In addition, we added $111 million in education funding, which will invest in our kids while reducing the amount of school funding raised through property taxes. This gets us closer to reaching the magic number of 55 percent of the total cost of education being covered by the state.
Outside of the budget, we also passed a law that provides a direct refund of $100 to those who qualify for the Homestead Exemption. As you can see, even though property taxes are handed on the local level, we are doing everything we can on the state level to make it easier to stay in your home. The state level changes will be in place for the 2020 tax season.
In case you aren’t familiar, here is some information about state and local property tax relief programs. The homestead exemption provides a reduction of up to $25,000 in the value of your home for property tax purposes. To qualify, you must be a permanent resident of Maine, the home must be your permanent residence, you must have owned a home in Maine for the twelve months prior to applying. There are no income requirements. Information can be found here: www.maine.gov/revenue/faq/homestead_ faq. html.
The Property Tax Fairness Credit is made available for eligible Maine taxpayers to receive a portion of the property tax or rent paid during the tax year on the Maine individual income tax return whether they owe Maine income tax or not. There is a means test for this program as it is based on your income. If the credit exceeds the amount of your individual income tax due for the tax year, the excess amount of credit will be refunded to you. Information on this credit can be found here: www.maine.gov.revenue/taxrelief/ptfcsummary.htm.
For Veterans, there is an additional benefit. A veteran who served during a recognized war period and is 62 years or older; or, is receiving 100 percent disability as a veteran; or, became 100 percent disabled while serving, is eligible for $6,000 exemption off their property taxes.
A paraplegic veteran who received a federal grant for a specially adapted housing unit may receive $50,000 exemption.
The city of Saco has a program that provides property tax relief to eligible seniors if they carry out so many hours of volunteering for the municipality. It’s called the Citizen Tax Workoff Program. Individuals must be 65 years of age prior to April 1, meet income guidelines, own their own home in Saco for a minimum of three years, and reside at that property. Upon acceptance into the program, participants will be assigned to work in a mutually agreeable location within the city. Some volunteer at city hall others at the Saco Train Station. Contact the Program Coordinator, Mary Starr, at 468-0392 with any questions.
In Old Orchard Beach, the town council also instituted a senior tax relief program. In order to qualify you must have received the Homestead Exemption and the Property Tax Fairness Credit. Must be a resident for 10 continuous years. Are 70 years of age or older and owe no past due property taxes. Any questions contact Diana Asanza in the Finance Department at 934-5714, ext. 1522.
I would encourage everyone to apply to both state level programs and then subsequently, your local relief programs as well.
It doesn’t hurt to apply and it could mean direct relief to reduce your overall tax burden. We must do everything we can to keep property taxes not just stable, but if possible, aim to reduce them for our long term, permanent residents.
Justin Chenette is serving his second term in the Maine Senate representing Saco, Old Orchard Beach, Hollis, Limington and Buxton. He is the chair of the Government Oversight Committee, co-chair of the Democracy Reform Caucus, and a member of the Environment & Natural Resources & Ethics Committees. He is also a Citizen Trade Policy Commissioner. Outside the Legislature, Justin is a Realtor with the Bean Group, Marketing Coordinator of Saco Sport & Fitness, and is Vice President of Saco Main Street.
Beyond the Headlines
Weekly Column featured in The Biddeford-Saco-OOB Courier Newspaper by Rep. Justin Chenette of Saco