We have all heard of Benjamin Franklin’s quotation, “In this world nothing can be said to be certain, except death and taxes.” Well, I like to look at a glass half-full rather than half-empty, so I will share a key tip on how to LOWER your real estate tax bill to take advantage of the property tax exemptions Vacationland has to offer!
The Maine Revenue Services offers a $15,000.00 Homestead Exemption for certain individuals that have owned a homestead property in Maine for at least a full year of occupancy AFTER April 1. This exemption is only offered to homeowners who reside in the property as their permanent residence.
What will the Homestead Exemption save you? Here is how that breaks down. Property taxes are levied according to a mill rate which varies per Town/City. The mill rate is the dollars and cents per $1,000 of value that you will pay in property taxes. For example, if you own a home valued at $100,000 and the tax rate is 20 mills, then your tax bill will be $2,000 (or $20 x 100). The tax liability for your home would be $2,000.00 for the year. With the $15,000.00 homestead exemption, the town would lower your assessed value from $100,000.00 to $85,000.00 to determine tax liability. Based on the $20.00 MILL RATE, your tax liability would now be $1,700.00 (or $20 x 85), saving you $300.00 for the year!
In addition to the Homestead Exemption, the State also offers a $6,000 Veterans Exemption. To be eligible for this exemption, you must:
· be a veteran who served during a recognized war period;
· is 62 years or older; or;
· is receiving 100% disability as a Veteran, or;
· became 100% disabled while serving.
Further a veteran who received a federal grant for a specially adapted housing unit may receive a $50,000.00 exemption. Additionally, the State offers exemptions for individuals who are determined to be legally blind ($4,000.00). The same calculation can be used as demonstrated above to determine your tax savings.
Applications for all exemptions can be found at www.maine.gov/revenue/propertytax/sidebar/exemptions.htm
If you have any specific questions about property tax bills, or real estate in general, I am happy to discuss your needs with you.
Erin Kalakowsky practices in Bergen & Parkinson’s real estate group. She can be reached at 207-283-1000 or firstname.lastname@example.org.