Tax Relief

**NOTICE**

LD 290 “Property Tax Stabilization for Senior Citizens” Repealed by State Legislature;
Two Tax Relief Programs Being Expanded

The LD 290 “Property Tax Stabilization for Senior Citizens” program, enacted in August 2022 was repealed by the Maine Legislature on July 6, 2023, with an effective date of October 11, 2023. The popularly regarded program had allowed Maine seniors 65 and older who owned a permanent residence for at least 10 years and were receiving (or eligible for) a homestead exemption, to freeze taxes at the previous year’s level regardless of income. 

The Maine Legislature repealed the program because they realized it disproportionately favored higher value properties without recognition of a resident's ability to pay. The legislature was not willing to shoulder the escalating costs of the program.

The repeal of this program means there will be no reapplication process.

Although the program has been repealed, your initial application will still be administered this year for the upcoming Tax Commitment in August 2023. Your taxes are stabilized for the 2023-2024 tax year (i.e., your bill will not increase for this tax year); however, the program is valid for one year only. 

As a result, approximately 1,850 eligible Scarborough applicants will only be responsible for the "frozen" property tax bill amount for the 2023-2024 billing cycle—this amount will be equal to the tax amount the owner was billed in 2022-2023, unless their new billed amount would be lower, in which case they would owe the lower of the two amounts. Per the law, the State will reimburse the Town for 100% of the difference between actual and frozen taxes. 

It is important to note that these are State programs and while the Town plays a role in the administration of them, the Town is not responsible for the policy objectives of these initiatives. Any questions or concerns owners have regarding this program should be directed to your legislative representative. To find your representative, please visit: Maine State Legislature.

Two existing state programs benefiting low-income seniors to be expanded

To help lower-income seniors avoid higher property taxes and remain in their homes, two existing State programs are being expanded:

1. The Property Tax Fairness Credit, which currently allows eligible Mainers to take a $1,500 credit, has increased to $2,000; it also loosens limits on the program in a way that allows the benefits to remain constant for a Mainer whose spouse passes away.

Note: This program is not administered by the Town of Scarborough; to claim the credit, you must file Form 1040ME and Schedule PTFC/STFC for the tax year during which the property tax or rent was paid. For help, call 207-624-9784.

For more info, please visit: Property Tax Fairness Credit Summary.

2. The State Property Tax Deferral Program, a lifeline loan program that covers the annual property tax bills of Maine seniors age 65 and older who cannot afford to pay them on their own, has been expanded. It doubles the income limit on that program to $80,000 and also raises asset limits. Taxes must be paid back when the home is sold or becomes part of an estate.

Note: This program is administered by the State; however, applications must be filed with the Assessor's Office between January 1 and April 1 each year.  Applications are forwarded to Maine Revenue Services who review and make the determination for acceptance and approval. Questions can be referred to Maine Revenue Services, Property Tax Division, at 207-624-5600 or prop.tax@maine.gov.

For more info, please visit: State Property Tax Deferral Program.

The Town of Scarborough offers its own property tax relief through our assistance program. The three eligibility requirements are:

1. Applicant is age 62 or older as of the application deadline
2. Applicant has been a Town resident for at least 10 years as of the application deadline.
3. Applicant’s household has an Adjusted Gross Income (AGI) of less than $50,000

To qualify, your annual property tax burden must exceed 5% of the household AGI. For mobile homes, we consider rent paid in addition to your tax burden. Applicants who qualify will receive up to $750 at the end of the year.

Applications for owners and renters are currently available and the application deadline is October 16, 2023.

This program provides a measure of property tax relief for certain individuals that have owned homestead property in Maine for at least 12 months and make the property they occupy on April 1st their permanent residence. Property owners would be eligible for an exemption of up to $25,000 (at 100% assessment ratio); the actual impact on your tax bill depends on the mill rate and certified ratio*.

*Since your property taxes are based on the local assessed value, the $25,000 statewide exemption must be adjusted to apply to all property in the state equally. For example, if the certified ratio in Scarborough is 94%, your homestead exemption is computed in the following manner: $25,000 x . 94 = $23,500.

Applications must be submitted by April 1 in order to qualify for the next tax year. Applications received after April 1 will not be effective until the following tax year. However, if you have already applied for this program you do not need to apply again on the same property. If you have recently moved or sold your property, you must reapply for the exemption on your new home, even if you are moving within Scarborough.

Homestead Property Tax Exemption (Title 36, M.R.S.A. Section 681)

The State of Maine offers a Veteran’s Exemption for property owners who meet one of the following criteria:

• Age 62 or older and served during a recognized war period
• Receives 100% disability from the VA
• Paraplegic Veterans
• Surviving spouse, minor child, or widowed parent of a Veteran

Applications must be submitted by April 1 in order to qualify for the next tax year. You must provide the Veteran’s DD 214 with the application. Applications received after April 1 will not be effective until the following tax year.

Veteran Property Tax Exemption Application
Veteran Property Tax Exemption Application (For Widowed Spouse, Minor Child, Widowed Parent)

(Title 36, M.R.S.A. Section 653)

The State of Maine offers a Blind Exemption to homeowners who are legally blind.

Applications must be submitted by April 1 in order to qualify for the next tax year. You must provide a letter from your doctor with the application. Applications received after April 1 will not be effective until the following tax year.

Blind Persons Property Tax Exemption Application

(Title 36, M.R.S.A. Section 654)

Effective April 1, 2022, the Town of Scarborough will begin taxing renewable energy equipment. This equipment can be exempt through the State of Maine Renewable Energy Equipment Exemption application.

Applications must be submitted by April 1 in order to qualify for the next tax year. Applications received after April 1 will not be effective until the following tax year.

Renewable Energy Exemption Application

(Title 36, M.R.S.A. Sect. 655/656)

In 2021, the Maine Legislature reinstated this property tax deferral program to help seniors and the fully disabled stay in their homes and age in place. For qualified and approved applicants, the State of Maine will pay the property taxes each year. The state will place a lien on the property and all deferred taxes (and accrued interest) are repaid to the state when the property is sold or the applicant passes away.

To qualify:

• An owner of the property must be 65 years of age or have a permanent disability that prevents an individual from being employed.
• An applicant or applicants must be the deeded property owner and must be receiving a Homestead Exemption.
• Applicants must have an income of less than $40,000 and liquid assets of less than $50,000 (or $75,000 if a joint application).
• The property must have NO municipal liens for unpaid property taxes filed against it at the time of application.
• Applications must be filed with the Assessor's Office between January 1 and April 1 each year. Applications are forwarded to Maine Revenue Services who review the application and make the determination for acceptance and approval.

FAQ for Taxpayers - Maine.gov - State Property Tax Deferral Program

Application & Instructions - Maine Property Tax Deferral Program

Program Guide for Municipalities

Questions on this State managed program can be referred to Maine Revenue Services, Property Tax Division, at 207-624-5600 or prop.tax@maine.gov.