County homeowners would see taxes go up without homestead exemption, group says
AUGUSTA, Maine — The Governor’s budget proposal to repeal the homestead property tax exemption for individuals younger than 65 could lead to tax increases for many homeowners across northern Maine, according to a report by the Maine Center for Economic Policy.
Statewide some 210,000 households would see a property tax increase of $313 on average if Governor LePage’s homestead exemption changes pass in the next budget, according to the Maine Center for Economic Policy.
The Governor’s budget proposal calls for limiting the homestead exemption to individuals 65 and older. The exemption is intended to help Mainers with property tax relief. It is available to permanent Maine residents for their primary homes and reduces a home’s municipal valuation for property taxes by up to $20,000 in 2017.
The Governor’s budget would also reduce the state’s effective top income tax rate from 10.15 percent to 5.75 percent by 2020, eliminate the estate tax and expand the sales tax, as well as expand a child care tax credit and pension exemptions.
The Maine Center for Economic Policy analyzed Maine tax data and found that under-65 homeowners in rural communities with higher property tax rates would be affected by the elimination of the homestead exemption.
According to the research group, 334 Washburn residents could pay on average $570 more in property taxes without the homestead exemption — among the highest average increases in the state.
1,412 Presque Isle homeowners would pay $509 more on average, 1,490 Caribou homeowners would pay $449 more on average, 952 in Houlton would pay $435 more on average and 656 in Fort Kent would pay $375 more on average.
Property taxes have risen in many places across the state in the last decade, amid state reductions in revenue sharing and ongoing local education costs.
The average property tax rate in Maine was $15.64 per $1,000 of property value in 2015, according to the group. In 2016, Presque Isle had a mill rate of $25.68 per $1,000.