The Portland City Council voted unanimously to approve a “bridge program” that will provide additional property tax relief to seniors until a state tax relief law takes effect next year.
The move comes as the city’s first revaluation in 15 years is going into effect. The revaluation dramatically increased taxes for some property owners, particularly on the peninsula, putting some seniors on fixed incomes at risk of losing their homes.
“Thank you to staff for finding a way to allocate funds and really put forward a lot of administrative effort to help with this custom program to get through this year,” Mayor Kate Snyder said.
The council action expands P-STEP, the Portland Senior Tax Equity Program, adopted in 2017. The program is available to residents who are at least 62 years old and receive the Maine Property Tax Fairness Credit. Last year, 180 residents participated, city officials have said.
The bridge program increases the maximum payment to qualifying taxpayers from $900 to $1,200 to match changes in the state program, and doubles the maximum payment to $2,400 for the current fiscal year only. The payment will be applied to the next property tax bill due this fall.
The expansion is expected to cost the city $100,000 for the current fiscal year.
The city calls it a bridge program because it’s designed to help people cover their tax bills until the new state law takes effect during the next fiscal year, which begins in July 2022.
That law – “An Act to Help Seniors and Certain Persons with Disabilities Remain in their Homes by Providing for the Deferral of Property Taxes,” will allow qualifying homeowners to postpone paying property taxes until their home is sold at a later date, when the deferred taxes can be paid from the proceeds.
The state will provide the city with a payment to cover the deferred property taxes and place a lien on the property, but not foreclose. Qualifying homeowners can then remain in their homes until they are sold.
The new law reinstates the state’s property tax deferral program, which was in place from 1989 to 1991. It allowed the state to pay the property taxes of those who qualify, then be reimbursed by the estate when the property owner or owners die or sell their home.
The bridge program requires significant additional administrative work and public outreach, but is critical for some homeowners, Finance Director Brendan O’Connell said last month.
Property taxpayers who qualify for the state program will be put on a customized payment plan utilizing all available resources, including P-STEP, to lower their tax bills until the state deferral program is available in the 2022-23 fiscal year.
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