Recently I held office hours at the McArthur Library with fellow Biddeford legislators to hear about issues facing our community. Property taxes, and especially the burden they present to older Mainers, dominated the conversation.
We are in the midst of a wildly overheated real estate market. My wife and I bought our house in 2017. If we were to sell it in today’s market, we could get at least $100,000 more than we purchased it for. But where would we go? This cycle of soaring property values is unsustainable. Imagine how hard it is on retired Mainers living on fixed incomes who bought their homes 50 years ago. The value of those properties, and the taxes associated with them, have skyrocketed.
Property taxes fund important services, but they are a fundamentally regressive way to raise revenue. It is understandable why legislators in 2022 voted in favor of the “Property Tax Stabilization Program,” which allowed older Mainers to freeze property taxes. But unfortunately this legislation had significant flaws.
The bill did not target relief to those who need it most, allowing wealthy Mainers to take advantage of the program while passing costs along to other taxpayers. It was also going to reduce revenues to municipalities over time, and the state was not going to be able to reimburse them fully. This meant that municipalities would have been forced to make difficult decisions about how to fund essential services.
We had to fix this, and determined that the best way to do so was to scrap this program and bolster two existing programs that have been successfully administered for years.
The Property Tax Fairness Credit has historically allowed tax filers to get up to $1,500 back each year. The expanded credit now gives tax filers up to $2,000 back. The expansion also tweaks the formula for determining the credit amount to prioritize the most significant returns for those 65 and up and ensures that a household will receive the same benefit whether it has one or more people over 65.
Previously, if a head of household lost their spouse, the surviving spouse would see their benefit reduced because the amount was based on the household size. The expanded credit creates a new eligibility category that is based purely on age and not number of individuals in the home in order to protect older Mainers from unfair benefit reductions.
Additionally, unlike the Stabilization Program that required a separate application, folks will receive this credit automatically when they file their taxes meaning less red tape for a better benefit.
The Property Tax Deferral Program is a lifeline loan program and another tool that ensures older Mainers can keep up with property taxes without putting homeownership at risk and without passing the buck onto other taxpayers. Municipalities still receive the property tax revenue through the loan, which is repaid when the estate is settled.
This year, we made the program available to more Mainers by raising the income level for eligibility and increasing the maximum asset test. For those who have fallen behind on property taxes, they can still enroll in the program, protecting them from displacement during an especially vulnerable time.
For more information about what you qualify for, call Maine Revenue Services at 207-624-9784 weekdays between 9 a.m.to noon.
Much more needs to be done to make housing affordable for all Mainers, including building more housing. If we do not accomplish this, especially near areas with vital services and jobs, Mainers who can least afford it, particularly older Mainers, will continue to be squeezed by housing prices and property taxes that are too damn high.
I will continue to work with my colleagues and others on finding real solutions to this complex problem. Please do not hesitate to reach out to me on this or any other topic at marc.malon@legislature.maine.gov.
Rep. Marc Malon is serving his first term in the Maine House, representing a portion of Biddeford. He serves as a member of the Veterans and Legal Affairs Committee and the Labor and Housing Committee.
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