AUGUSTA — Senior citizens’ fears of losing their homes because of growing property taxes prompted a new law authorizing payment deferrals for eligible homeowners, sponsors said Wednesday.
Rep. Kathleen Chase, the bill’s sponsor, said that in her southern Maine district a retired woman saw her home’s value rise from $161,000 to $800,000, triggering a sharp increase in property taxes.
“She called me up in tears, very upset, and didn’t know what to do,” said Chase, R-Wells. Without any alternative, the woman’s 151-acre parcel was sold and developed by a drug store chain, Chase said.
The bill, celebrated Wednesday by Gov. John Baldacci with a formal signing ceremony, authorizes towns and cities to allow property tax deferrals for homeowners who are at least 70 years old, have lived in their home for at least 10 years and have a household income of less than 300 percent of the federal poverty level.
The taxes could be deferred until the homeowner dies or the home is sold. Then the taxes would have to be repaid within a set period, along with interest at a rate of 0.5 percent above the annually established rate for delinquent taxes. The premium would help towns recoup administrative costs, said Chase, a former tax assessor.
While the bill doesn’t mandate such programs, Chase and the bill’s co-sponsors said they’re convinced there’s a demand and many towns have already expressed an interest in allowing deferrals.
“Many elderly residents on fixed incomes, especially those in lake and coastal communities, just want the ability to stay in the homes they have worked so hard to maintain,” Baldacci said.
Maine’s law, which takes effect July 12, is a modified version of what several other states already have done, Chase said.