Property Tax Stabilization for Senior Citizens, also known as the Property Tax Stabilization Program (the “Program”), is a State program that allows certain senior-citizen residents to stabilize, or freeze, the property taxes on their homestead. As a result of recent changes in the law, the Tax Stabilization Program will only apply to the property tax year beginning April 1, 2023 (applications were due December 1, 2022). However, this same legislation (LD 130) has expanded the eligibility thresholds for participation in the Property Tax Deferral Program and increased the maximum benefit available under the Property Tax Fairness Credit for those age 65 and older.
- The bill raises maximum income for the tax deferral program from $40,000 to $80,000 and increases the maximum asset test to $100,000.
- The bill increases the Property Tax Fairness Credit for Mainers 65 or older from $1,500 to $2,000.
- It also establishes a new Maximum Benefit Base for those 65 or older at $4,000 and indexes it to inflation.
- In 2022, the Legislature enacted LD 290, which created the Property Tax Stabilization Program.
- The program allowed residents 65 and over to freeze their property taxes if they are a permanent Maine resident, have owned a home for 10 years and are eligible for the homestead exemption.
- Eligible residents who move may transfer the fixed tax amount to a new homestead, even if that new homestead is in a different Maine municipality.
- Applications must be filed annually, otherwise the bill for the next tax year would revert to the “normal” amount of tax.
- The state would reimburse municipalities for the lost revenue.
- This program had significant flaws, including a lack of income limits or limits based on property value. Recipients could also take advantage of a loophole that would allow them to transfer their stabilized rate from a property with a low property tax rate to a high one.
- Its fiscal impact was also expected to balloon exponentially in the coming years, leaving other taxpayers to cover the costs.