Whether you are a residential home owner or a business property owner there are ways you can possibly reduce your tax bill.
Apply for your Exemptions
Make sure you have the Veterans ($6,000) and/or Homestead ($20,000) Exemptions, if available to you. There is also a Blind Exemption. Commercial business owners should check to see if they can lower their personal property tax bill by applying for the BETE which stands for Business Equipment Tax Exemption.
Check Your Assessment Card
Get a copy of your assessment card and check that all the information is correct such as number of baths, number of bedrooms, unfinished or finished basement, acreage, etc. Condition Changes Inform the assessor if your property’s condition changes or if you remove or tear down an old barn or shed.
Survey
If your land has been professionally surveyed check to make sure the total acreage on your survey plan matches what is on your assessment card and tax map.
Merge Land Parcels
If you currently receive two tax bills because you have two or more separately assessed parcels you may wish to consider merging them all to form one parcel for tax purposes. This will generally lower your taxes if they are contiguous to one another.
Business Equipment Tax Reimbursement Program
The Business Equipment Tax Reimbursement Program (BETR) is designed to encourage new capital investment in Maine. The program reimburses local property taxes paid on most qualified business property.
Tax Abatement
If you have information that will help prove the value is high please bring it to the assessor’s attention and if the assessor agrees you will receive a tax abatement. If the assessor disagrees you may appeal to the local Board of Assessment Review.
Hardship (Poverty) Abatement
If you are having trouble making your tax payments and can provide the General Assistance Administrator evidence of financial pressures you should apply for and may be granted a Hardship Abatement (sometimes referenced as a Poverty Abatement). This application will be referred to the Board of Selectmen for a decision and they will do everything possible to work with and help you to avoid foreclosure.
The Maine Constitution says that property shall be assessed at its “just value.” The courts have interpreted “just value” to mean fair market value or in other words “what the property is worth.” A property’s worth is commonly looked at as “what a willing buyer would pay a willing seller” for a particular piece of property.
Determining the market value of property is no easy task. Local assessors use three basic methods to determine a property’s worth. To find the value of any piece of property the assessor must first know what properties similar to it are selling for, what it would cost today to replace it, how much it takes to operate and keep it in repair, what rent it may earn, and many other dollar facts affecting its value, such as the current rate of interest charged for borrowing the money to buy or build properties like yours. Using these facts, the assessor can then go about finding the property’s value in three different ways.
SALES COMPARISON APPROACH
The first method compares your property to others that have sold recently. These prices, however, must be analyzed very carefully to get the true picture. One property may have sold for more than it was really worth because the buyer was in a hurry and would pay any price. Another may have sold for less money than it was actually worth because the owner needed cash right away. The property was sold to the first person who made an offer. When using the sales comparison approach, the assessor must always consider such overpricing or under pricing and analyze many sales to arrive at a fair valuation of your property. Size, quality, condition, location, and time of sales are also important factors to consider.
COST APPROACH
A second way to value your property is based on how much money it would take, at current material and labor costs, to replace your property with one similar. If your property is not new, the assessor must also determine how much it has depreciated. In addition, the assessor must also determine how much a lot like yours would be worth if vacant.
INCOME APPROACH
The third way is to evaluate how much income your property would produce if it were rented as an apartment house, a store, or a factory. The assessor must consider operating expenses, taxes, insurance, maintenance costs, and the return most people would expect on your kind of property.
One, two or all three of these methods might be used to help the assessor determine the fair market value of your property. It is also important to note that land and buildings are valued separately. Therefore, a home with water frontage may be assessed at a significantly higher value, because of the land’s value, than an identical home without water frontage.
To implement the constitutional requirement that real estate be assessed at its “just value,” and in recognition of the tremendous difficulty and costs to a municipality to maintain a “just value” assessment, the Maine Legislature enacted assessing standards that municipalities must meet. One standard is that the total local valuation of taxable property not falls below 70% of fair market value. Another standard is that the quality ratings of assessments not exceed 20 (which basically mean that the difference in valuation between similar properties should never be greater than 20%).
Revaluations are commonly used when a community falls below the assessing standards. During a revaluation, all property in the municipality is inspected and assessments are adjusted to their fair market value.
Both real (land and buildings) and personal property (tangible goods) are subject to taxation, unless they are exempted by law or subject to another form of taxation, such as the excise tax for motor vehicles and boats. The property tax bill for most Maine homeowners is based on the value of the land, the house, and the outbuildings.
Local assessors are required by law to “ascertain as nearly as may be the nature, amount and value as of the first day of April of the real estate and personal property subject to be taxed . . .” This means that if on the 1st day of April you own property that is subject to taxation, then you are liable to pay those taxes to your municipality.
In calculating a property tax rate, the Minot Board of Selectmen work with the Assessor's Agent to determine the amount of revenue needed to be raised by the property tax to fund all of our municipal services. That amount is then divided by the total local assessed valuation to get the local tax rate. For example, a town that has a local assessed valuation of $100 million and needs to raise $2 million in property taxes will require a tax rate of 20 mills to do so ($2,000,000 divided by $100,000,000 equals .020).
Another way to look at the mill rate is as a percentage of value. For example, if your home is valued at $100,000 and the mill rate is 20, then your property taxes are equal to 2% of your home’s value; if the mill rate is 15, then it is 1.5% of the home’s value; 10 mills is 1%. You can estimate your taxes by dividing your valuation (minus exemptions) by $1,000 and multiply by the mill rate.
The Assessor' Agent calculates how much must be raised in property taxes based on what has been approved at the recent Town Meeting.A tax commitment listing all the property in town, its value and the taxes that are owed is then signed by the Assessors and given to the tax collector who sends out the tax bills. In Minot, property taxes are committed in July and are paid in one installment due in December. Property taxes may also be escrowed and payments made as part of a homeowner’s monthly mortgage payment. You should forward your tax bill to your mortgage company so they are aware of due dates
Property taxes in Maine generate over $2.0 billion a year to fund local government services. Of the three major taxes – income, sales and property – used to fund Maine State and local governments, property taxes comprise the larger slice of the revenue pie. Property taxes generally account for 44% of the revenues in Maine generated by the three major taxes. The income taxes (corporate and personal) generate 30%, and the sales tax generates 26% of the total.
Property taxes have been with us since colonial times when a person’s wealth could be measured in the amount of property a person owned. Although it is our oldest form of taxation in Maine, the property tax still remains widely misunderstood. As the fundamental structure of our economic system has evolved from an agricultural economy to a manufacturing economy to a services-based economy, the patterns of ownership have changed and the property tax has become quite regressive because it is no longer necessarily based on a person’s wealth or ability to pay.
Properties are appraised so that those of us who want the advantages of having schools, fire and police protection as well as other public benefits can absorb our fair share of the cost, in proportion to the amount of money our individual properties are worth. The property tax is part of a well-balanced revenue system. It is a more stable source of money than sales and income taxes because it does not fluctuate when communities have recessions. When the community spends your tax dollars on better schools, parks, and so on, your property values rise. Some of the windfall benefits you receive are recaptured by the property tax