Homestead Property Tax Deferral for Seniors and Persons with Disabilities

State

Maine

Year

2022

Variations in Receipt of Benefit

No Variation in Receipt of Benefits

Benefit Type

Deferral

Benefit

The program defers all property taxes including ad valorem taxes, assessments, fees, and charges entered on the assessment and tax roll. The deferral results in a lien being placed on the property for the amount of taxes deferred plus interest.

How is Benefit Disbursed

Other

Eligible Property Type

Residential

Characteristics of Eligible Property

Only residential property not greater than 10 contiguous acres is eligible. Mobile and floating homes may qualify for the program. If the homestead is located in a multi-unit building, the portion used as the principal residence is eligible.

Eligibility Criteria

Age

Disability

Homeowner

Income Ceiling

Principal Residence

Wealth Limit

Surviving Spouse

Description of Eligibility Criteria

The taxpayer must be disabled or 65 years of age or older, own the fee simple estate or be purchasing the fee simple estate under a recorded instrument of sale, have a total household income below $40,000 annually, and occupy the property as their principal residence. Single taxpayers must have liquid assets not exceeding $50,000 in value and taxpayers filing jointly must have liquid assets not exceeding $75,000 in value. The taxpayer must not have a municipal lien or a municipal deferral on the property. The taxpayer must receive a homestead exemption for the property. To qualify for the homestead exemption, the taxpayer must be a permanent resident of the state and owned a homestead in the state for the preceding 12 months. If the taxpayer loses eligibility due to death, sale of property, or moving, the taxpayer's spouse may continue the deferral of prior years' taxes. If the spouse independently qualifies for the program, they may continue to defer current taxes for as long as they qualify for the deferral.

Local Option in Adoption of Program

Local government is unable to exercise an option

Local Option Regarding Program Features

No local option regarding program features

State Funding for Local Tax Loss

State reimburses all of the local government tax loss

Description of State Funding for Tax Loss

The state reimburses municipalities for the full amount of the deferred taxes due.

Record ID

ME108_RR22

Footnotes

Effective 01 April 2022: The program is reinstated and is no longer being phased out. A definition for disability was added and the definition of homestead was expanded to include the taxpayer-occupied principal dwelling and up to 10 contiguous acres upon which it is located that is held in a revocable living trust for the benefit of the taxpayer. "Liquid asset" and "municipality" were defined. The statute expanded the program to include people who are unable to be employed by reason of a disability. The income cap was increased from $32,000 to $40,000, and the statutory reference for the definition of income was changed. Liquid asset caps for single- and jointly-filing taxpayers, respectively, were added. Requirements that the property not be receiving a municipal deferral or have a municipal lien against it, and that the property receives a homestead exemption were added. The State Tax Assessor is no longer authorized to prorate payments to municipalities when there are insufficient funds available in the revolving fund. All of these changes are pursuant to 2021 Me. Laws ch. 483 § AA (LD1733 / SP0577). Taxpayers must file applications before 1 April for the first year that they wish to defer taxes. Deferred taxes accrue interest at the rate equal to the prime rate as published in the Wall Street Journal on the first day of September of the preceding calendar year, rounded up to the next whole percent. For calendar year 2022, the applicable interest rate for taxes deferred under the program is 4%. The taxpayer's estate or heirs may extend the deferral in the event the claimant dies. Extensions cannot exceed 5 years and interest will continue to accrue during the period of extension. An application for deferral applies to the assessment year in which it was approved and indefinitely until a disqualifying event. Applicants do not need to reapply each year and do not need to maintain eligibility for all of the eligibility requirements every year, only for the year in which they apply. The amount of deferred taxes plus interest is due 30 April of the assessment year following a loss of eligibility due to death, sale, or the claimant moving. In the case that the claimant loses eligibility because their house moves out of state (typically for mobile and floating homes), taxes are due 5 days before they move the house. A liquid asset is defined as something of value available to an individual that can be converted to cash in 3 months or less, which includes: bank accounts, certificates of deposit, money market and mutual funds, life insurance policies, stocks, bonds, lump-sum payments, and inheritances.

Sources

Me. Rev. Stat. Ann. tit. 36 § 186;
Me. Rev. Stat. Ann. tit. 36 § 683;
Me. Rev. Stat. Ann. tit. 36 § 6250 ~ § 6267 (in effect for 2022)
Maine Revenue Services, Property Tax Division, The State Property Tax Deferral Program: A Guide for Municipalities
[https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/PropertyTaxDeferra%20ProgramMunicipalGuide..pdf Accessed 03/08/2023]
View Archived Source

Maine Revenue Services, Property Tax Division, The State Property Tax Deferral Program: A Guide for Applicants
[https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/DeferralApplicantGuide.pdf Accessed 03/08/2023]
View Archived Source

Maine Revenue Services, Property Tax Division, Property Tax Deferral Application on Owner-Occupied Homesteads
[https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/deferral%20app.pdf Accessed 03/08/2023]
View Archived Source
State of Maine Department of Administrative and Financial Services, Maine Revenue Services, State Property Tax Deferral Program
[https://www.maine.gov/revenue/taxes/tax-relief-credits-programs/property-tax-relief-programs/deferral-program Accessed 03/07/2023]
View Archived Source
2021 Me. Laws ch. 483 § AA (LD1733 / SP0577)

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