LD 290 Property Tax Stabilization

LD 290 Property Tax Stabilization for Seniors Repealed by State Legislature

The LD 290 “Property Tax Stabilization for Senior Citizens” program, enacted in August 2022, was repealed by the Maine Legislature on July 6, 2023, with an effective date of October 11, 2023.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 repeal of this program means there will be no reapplication process and no need to follow-up with the Assessing Department in late August/early September, as previously communicated.

Although the program has been repealed, initial applications will still be administered this year for the upcoming Tax Commitment in August 2023.  As a result, eligible Vinalhaven applicants will only be responsible for the “frozen” property tax bill amount for the 2023 billing cycle—this amount will be equal to the tax amount the owner was billed in 2022, unless their new billed amount would be lower, in which case they’d owe the lower of the two amounts.  Per the law, the State will reimburse the Town for 100% of the difference between the 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.

Two Tax Relief Programs Being 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 Vinalhaven; to claim the credit, you must file a Maine Tax Return (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 information, please visit: https://www.maine.gov/revenue/taxes/tax-relief-credits-programs and click on Property Tax Programs.

2. The State Property Tax Deferral Program, a lifeline loan program that covers the annual property tax bills of Maine seniors 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 raises asset limits.  Taxes must be paid back when the home is sold or becomes part of an estate.  Note: This program is not administered by the Town of Vinalhaven; 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.  For more information, please visit: https://www.maine.gov/revenue/taxes/tax-relief-credits-programs and click on Property Tax Programs.

Frequently Asked Questions:
Q: What's happening with the Stabilization law?
A: The Legislature has repealed and replaced it.  It will remain in effect for just this one tax year.  So, if you applied last year, you'll get the benefit of the "freeze" on this year's bill.  Since the program has ended, there is no re-application

Q: Why did it get repealed/replaced?
A: The State realized that the Stabilization law disproportionately favored the wealthy and the cost of the program would balloon out of control.

Q: What is the new law?
A: It consists of an expanded Senior Property Tax Deferral program and an expanded Property Tax Fairness Credit instead of the freeze on property taxes.  You can be enrolled in both.

Q: How does someone apply for these other programs?
A: There will be no application at Town Offices.  Instead, the application process will flow through the Maine Revenue Services and is administered by the State.

August 9, 2023 Notice