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(From the Financial Literacy Blog) – According to the United States Census Bureau, Maine is the oldest state in the nation. Maine’s median age had risen year-over-year for more than two decades, reaching the all-time high of 44.8 years of age in 2020. While the median aged dropped to 44.7 in 2021, that number is still significantly higher than the national average of 38.8 years. Many of our state’s older residents are living on a fixed income, such as Social Security, and inflation is making it increasingly difficult to successfully balance their budgets. Other non-fixed expenses, such as property taxes, make money management even more challenging. In an effort to help seniors, the Maine Legislature passed a bill that will allow some older Mainers to freeze their property taxes. The law officially goes into effect on August 8.
What Are Property Taxes?
For homeowners, this is a tax paid on the property they own. It is calculated by local governments, also known as municipalities, based on the value of the owned property. Municipalities will use the paid taxes to fund services in the community, such as public schools, law enforcement, fire protection, and road and infrastructure maintenance.
What Is a Property Tax Freeze?
A property tax freeze will prevent future tax increases for eligible homeowners in an effort to help seniors stay in their homes. For example, let’s say you’re a Maine senior who pays $2,600 in property taxes this year. In this example, your local municipality increases tax rates next year, resulting in what would be a $2,800 tax bill. However, if you were granted a property tax freeze after applying this year, your tax bill would remain at $2,600 instead of increasing.
Who Is Eligible?
In order to be eligible for a property tax freeze, people must be 65 years of age or older. Further, they have to be a permanent resident of Maine, have owned their home for ten years, and their homestead must be enrolled in the Homestead Exemption program. Eligible residents may transfer the fixed tax amount to a new homestead, even between municipalities. If a senior moves to a home with a higher tax expense, they would pay the amount of their former cost—as long as their tax freeze application was granted.
How Do Maine Seniors Apply?
Mainers aged 65+ will need to apply with the municipality where their homestead is located on or before December 1. If granted, next year’s tax bill will remain the same as this year rather than increasing. The application is now available on the Maine Revenue Services’ website. If they prefer an application be mailed to them, seniors can make the request by calling the Property Tax Division Maine Revenue Services at (207) 624-5600. Eligible Mainers will need to apply annually in order to maintain their property tax freeze. Failure to apply could result in a property tax increase. For more information on the application process, Mainers are encouraged to reach out to their local municipality.
If you’re facing financial challenges, reach out to your local credit union to see how they can help—whether by providing education, refinancing loans, or offering better rates and terms.