Is your town considering a property tax deferrment program for senior citizens? An Act to Protect Elderly Residents from Losing Their Homes Due to Taxes or Foreclosure became Maine law July 12.
The 124th Legislature passed the bill in May,which allows Maine cities and towns to establish a property tax deferral program for senior citizens. Citizens applying for a property tax deferral must be at least 70 years old, lived in their homes for at least 10 years, and have a household income of less than 300% of the federal poverty level, which is about $30,000 for a single person and $42,000 for a couple.
The new law allows towns to let property taxes be deferred until the death of the homeowner or sale of the home. Then the taxes would have to be repaid within a set period, along with interest at a rate of 0.5 percent above the annually established rate for delinquent taxes.
Now, Maine towns that want to establish a property tax deferral program for their citizens will have to craft a program that is appropriate for the needs of their town and put it forth in a town referendum. There are safeguards for the town, including what amounts to a tax lien placed on the property, to assure that the town has legal standing. Towns working on their programs will have to discover the answers to questions like, what happens if the house is in estate recovery to repay Maine Care? Which repayment takes precedent?
The bill, signed by Gov. John Baldacci on May 20, passed through the Legislature with 136 yeas, 0 nays, and 15 absent. Not much voting along party lines with this one!
If you cruise forums that talk about this law, there’s a lot of writing about how it shifts taxes to other taxpayers, or that the property tax rate is a bad way to fund government in general, or that taxes are simply too high, and lowering taxes for everyone is the answer. Those are all valid points. But in the discussion of this law, remember that it is a local opportunity and individual townspeople control whether or not they think it’s a good idea to allow a property tax deferral for the town elders if requested.
My thinking is that allowing people to stay in their homes is almost always better for society. See if your town has a committee to look into tax deferral for your town, and work through all the questions considering such a program will raise. It’s a great volunteer opportunity!