The Maine Homestead Act

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The state of Maine's basic unit of local government is the New England town structure. "It is the level of government which citizens have the greatest access to and the most control over," according to the Maine Municipal Association. Town property taxes support the town and the county. The Homestead Act or Maine Homestead Exemption is an act the Maine legislature passed to help Maine property owners with the growing burden of town property taxes.

History

  • According to the department of assessment for Lewiston, Maine, the Maine Municipal Association conducted a study on Maine's income, sales and local property taxes. The study revealed that most Maine residents believed that local property tax relief "should be the state's top priority." In 1998, the state legislature enacted a homestead exemption. Originally, the exemption was a decrease in value of $7,000 from the property assessment. The exemption grew to $13,000 by 2005; however, the legislature lowered it to $10,000 starting in 2010, according to the Maine Municipal Association.

Definition

  • The state of Maine defines homestead as "any residential property in this State assessed as real property owned by an applicant or held in a revocable living trust for the benefit of the applicant and occupied by the applicant as the applicant's permanent residence." It does not include property used solely for commercial purposes. Permanent residence is the principal establishment of the residence. You may only have one permanent residence at a time; therefore, you may only have one homestead exemption at a time.

Process

  • In order to qualify for the exemption, you must have owned the Maine property for a continuous 12 months. Residents must complete an application, which is available at their local town offices or city offices. Some towns have the application on their websites. The application must be completed and returned to the town officials by April 1 in order to be exempted when tax bills are mailed in the fall. Once you have completed an application and are approved, you do not need to apply again unless you move.

Application

  • The application is brief. It asks three questions to certify that the home is yours and that you are a legal resident of the state of Maine. It requires the names of all property owners on the tax bill, as well as the physical location of the homestead property. You must declare that the answers are to the best of your knowledge and "belief, true, correct and complete." The application must be signed and dated before returning it to the town office where it is approved and filed with the local assessor.

Significance

  • According to the Maine Municipal Association website, property taxes in Maine are "the primary source of revenue for Maine’s cities and towns." Property taxes help finance Maine schools and county governments. The Maine Municipal Association states, "the average Maine community uses 68 percent of its property taxes to fund education." Property taxes also fund an average of 58 percent of the cost to run local government, as well as contributing to the county. Other sources of revenue are state assistance, excise tax, and additional fees established by the individual towns.

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