Maine lawmakers have introduced a bipartisan bill that would incrementally increase the state’s property tax homestead exemption over the next several years.
By lowering the tax-assessed value of Mainers’ homes, the homestead exemption helps to reduce the total property tax bill for which homeowners are responsible.
Currently, the homestead exemption allows Mainers to take $25,000 off the total tax-assessed value of their homes.
Under the proposed legislation, this would increase by $10,000 annually beginning in 2026 until it reaches a total of $95,000 in 2033.
At this point, the homestead exemption would continue to increase annually in accordance with the cost of living.
LD 140 — An Act to Incrementally Increase the Homestead Property Tax Exemption — was sponsored by Sen. Joe Baldacci (D-Penobscot) and cosponsored by Sen. Donna Bailey (D-York), Sen. Scott Cyrway (R-Kennebec), Rep. Amy J. Roeder (D-Bangor).
A public hearing on this bill in front of the Legislature’s Taxation Committee can be expected at some point in the coming months.
Click Here to Read the Full Text of LD 140
This is not the only property tax bill to have been introduced so far this legislative session.
For example, Sen. Rick Bennett (R-Oxford) brought forward a bill earlier this month that would increase the homestead exemption to $75,000 for Mainers 65 and older.
Under this proposal, seniors would qualify for the increased exemption if they have resided in their home for at least the past ten years.
If approved, seniors would be able to begin claiming the increased exemption this year.
[RELATED: Maine Lawmakers to Consider Additional Property Tax Relief for Senior Homeowners]
In 2024, many Maine homeowners saw their property tax bills increase by double-digit percentages, placing a significant financial strain on those with fixed incomes.
Considering Maine already has the fourth highest tax burden in the country — and the highest property tax burden of any state — Mainers have been feeling the property tax pinch more than ever.
In recent months, the Maine Wire received numerous messages from taxpayers in towns from Gray to Newcastle to Carthage reporting dramatic property tax hikes reflected in their FY25 bills.
While rising budget costs are often to blame for more expensive property tax bills, many of these increases appear to be the direct result of revaluations that have been conducted in response to the changes that have taken place in Maine’s housing market.
[RELATED: Sticker Shock — Maine Homeowners Burdened by Property Tax Hikes Following Recent Revaluations]
Under Maine’s constitution and state law, real estate must be assessed “according to [its] just value,” which according to case law, is equivalent to its market value — or the price for which it could reasonably be expected to sell.
A law approved by the Legislature in 1975 directed municipalities to have a minimum assessment ratio of 70 percent, meaning that the tax assessed value of a given property is not supposed to be less than 70 percent of its market value.
Generally speaking, municipalities revalue properties when they fall below this 70 percent threshold, whether that be due to the passage of time or a significant shift in the housing market.
Since 2019, home prices in Maine have nearly doubled, according to data tracked by the St. Louis Federal Reserve.
These higher sale price contribute to the increased valuations of houses that aren’t on the market, meaning that Mainers who have owned their homes for 20 years or more are suddenly on the hook for paying twice the property tax — even if their income has hardly grown.
[RELATED: Mainers Bear Nation’s Highest Property Tax Burden, 4th Highest Tax Burden Overall — WalletHub Study]
According to a recent study conducted by personal finance website WalletHub, Mainers currently bear the nation’s highest property tax burden, contributing an estimated 4.86 percent of their personal income to these taxes.
For comparison, residents of Alabama — the state found to have the lowest property tax burden — pay just 1.33 percent of their personal income in property taxes.
The end of rising property tax bills may not be coming any time soon. Several towns have yet to undergo revaluations, so similar hikes could be coming down the pipeline over the next two to three years for many Mainers.
