It was a simple calculation for a 66-year-old Cape Elizabeth man: Pay thousands of dollars in new property taxes that could come as his town undergoes a major school development project or freeze them and have the state pay any difference.
“You expect it to go up a little bit,” said Don, who declined to give his last name. “But not what this new school might cost.”
He is one of 214 seniors who have already applied for Maine’s new property tax stabilization program, which went into effect on Monday. The novel program, enacted in a low-key fashion by the Maine Legislature this year, allows Mainers 65 or older to freeze their taxes even if they move.
The generous program is a major deal for the oldest state in the nation and the one with the second-highest homeownership rate. Here is some more info about how to apply.
Who is eligible and how does it work?
To apply, you need to be 65 by April 1 of the tax year that you are requesting stabilization. For current applicants, that would be 2023. You must also be a permanent resident of Maine, have owned a Maine home for 10 years or more and be eligible for the Homestead Exemption. The state wants those wondering if they qualify for the latter to contact their local tax assessor.
There are no income requirements. If the home is owned by multiple people, only one of the joint tenants needs to qualify.
Under the program, your tax bill will freeze and not go any higher as long as you apply for the program each year. The only time it will change is if the amount you owe is less than the frozen amount. Your tax bill would then be frozen at a new, lower amount.
What if I move?
The program is generous: You can freeze your taxes even if you move to a new, more expensive home — or even a whole new community. It brings to mind strange potential scenarios, Cape Elizabeth Tax Assessor Clinton Swett noted.
One used at a recent training session for assessors from across the state in Belfast was someone living in a mobile home winning the lottery and moving to a much more expensive property. If they qualified for the program, they would be able to pay the mobile home rate even if they went to a seaside mansion.
Who pays the difference?
The state is committed to doing so, although lawmakers have only dedicated an insignificant amount of funding to the program so far. That has given some municipal officials pause, including Kennebunkport Assessor Becky Nolette, who has already gotten 45 applications in Maine’s most expensive community for housing.
“The concept of it is a good program,” Nolette said. “I just don’t necessarily think the implementation has been good.”
Many assessors worry that tracking changes will be hard. Upending years of common practice, assessors will need to keep track of what the new valuations are each year while having a segment who won’t be paying tax rates connected to them.
“Most communities don’t know how they are going to show the adjustment,” Nolette said.
Be sure to apply by Dec. 1.
The easiest way to do that is by going to your local assessment office. Forms are available on the state’s website and are due by Dec. 1.
The application does not automatically renew: You will need to reapply every year if you want your taxes to stay frozen.