New law will provide tax relief for thousands of Maine seniors

Legislation Gov. Janet Mills enacted property tax relief on Monday for thousands of people aged 65 or older and earning less than $ 40,000 a year.

The property tax deferral program comes with conditions. The state will pay property taxes for those who apply and qualify, but the state will have the power to obtain a lien on the applicant’s real estate. All property taxes paid by the state will be refunded to the state when the property is sold or the participant (s) die.

The bill’s chief sponsor, Senator Donna Bailey, D-Saco, said the timeline for the legislation, which she has been working on for several years, could not have been better as taxpayers in South Portland and Portland are struggling to come to terms with new property appraisals that in some cases have pushed their property tax bills into brackets they can’t afford. Bailey said his bill will allow seniors to age in place without fear of municipal retaliation for non-payment of property taxes.

The amounts of tax relief under the property tax deferral program would not be capped and would be based solely on a person’s property tax bill, Bailey said.

“I hear too many stories of seniors who just can’t afford food, medicine and property taxes, which means they end up having to choose one over l ‘other and then do without what is necessary,’ she said. “Seniors have worked hard all their lives to pay off their mortgages and earn a quiet retirement inside their homes. But the reality is that they are struggling to pay higher and higher property taxes. Property tax relief for the elderly was one of my first priorities since becoming a legislator, and I am very proud to finally see this become a reality.

The legislation, LD 1638, will draw on federal pandemic relief funds to reinstate a former tax deferral program that began in 1989 but was suspended in 1991 during a state budget crisis. caused by a recession. The state continued to collect revenue from the old program and was reimbursed for all of the tax deferral money it paid to municipalities. The last person in this program died in 2018 – the year the last reimbursement was received.

The new law will come into effect on October 18, 90 days after it is signed by Mills.

Bailey said there is no shortage of money for the senior tax relief program. Another bill passed, LD 1733, provides that $ 3.2 million in Federal American Rescue Plan funds will be allocated to establish the revolving senior tax deferral account. These tax relief funds will be available until fiscal year 2023. After that, funding for the tax relief will be provided by the Housing Opportunities for Maine (HOME) program administered by MaineHousing. The perpetual fund program receives income from property transfer taxes paid by buyers and sellers.

“The HOME program has always been well funded and never ran out of money,” Bailey said.

It is not known how many seniors would be eligible for assistance under the “Helping Seniors and Certain Persons with Disabilities to Remain in Their Homes Act by Providing for Deferment of Property Taxes”. Bailey said it would be correct to say that thousands of Mainers are likely eligible. Maine Revenue Services, which was involved in the development of LD 1638, could not be reached on Wednesday evening.

“The majority of seniors in Maine who receive Social Security benefits are likely to qualify,” Bailey added.

A representative from the Maine Council on Aging testified on the bill before the Standing Joint Committee on Taxation in May. He told committee members that there were more than 300,000 Maine residents over the age of 65. The Maine Council on Aging said Social Security benefits, as a source of income, mask poverty among older Mainers.

“While less than 10 percent of older Mainers live at or below the federal poverty line, more than a third of Mainers who are 65 and over live on Social Security alone, with an average income of just over $ 18,000, ”the board said in writing. testimony. “This is roughly 140% of the federal poverty level and is not enough income for these people to meet their basic needs. “

One of the co-sponsors of Bailey’s Bill was Senator Joseph Rafferty, D-Kennebunk.

“Seniors face many challenges, especially heavy property taxes. Many seniors have lived in their homes for decades while contributing to the growth and prosperity of their communities, ”Rafferty said in a statement. “This property tax relief for the elderly is designed to allow them to continue living without fear of being displaced.

Since 2020, property taxes have risen sharply largely due to a home buying spree fueled by the COVID-19 pandemic.

Bailey and Rafferty said higher property taxes hit seniors particularly hard, as they often live on fixed incomes that can include retirement savings and social security. Lawmakers said 29 percent of Maine seniors live in low-income families, and 56.4 percent of Maine seniors who receive Social Security payments receive an average of $ 11,964 per year.


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