After a year in which many Mainers were burdened with skyrocketing property tax bills, state lawmakers are poised to consider a bill giving senior citizens an additional measure of relief.

Introduced by Sen. Rick Bennett (R-Oxford), LD 7 — An Act to Increase the Homestead Property Tax Exemption for Residents 65 Years of Age or Older — would increase the value of the homestead exemption to $75,000 for Mainers 65 and up.

Currently, the max value of the homestead exemption is set at $25,000.

Under the proposed law, seniors would qualify for the increased exemption if they have resided in their home for at least the past ten years.

Generally speaking, the homestead exemption reduces a property’s valuation by a given amount for the purposes of calculating property taxes.

If approved, the increased exemption would be applicable for the tax year beginning on April 1, 2025.

Click Here to Read the Full Text of LD 7

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.

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 one could reasonably expect it to be sold.

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 undertake revaluations 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. Those new sale prices contribute to the new valuations of houses that aren’t on the market, which means 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.

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 be nowhere in sight. Several towns have yet to undergo their revaluations, meaning similar hikes could be coming down the pipeline over the next 2-3 years.

Adding to the concern is that the State Legislature’s decision earlier this year to abolish the 2005 cap placed on municipal property tax increases.

The now-repealed law — referred to as LD 1 — was originally implemented in January 2005 after “countless hours” of consideration by the Legislature’s Joint Select Committee on Property Tax Reform” and was ultimately passed “by wide margins in both houses,” according to a 2006 report on the law.

“LD 1 limits growth of each municipality’s property tax levy to the growth rate of Maine’s average personal income (adjusted for inflation) plus the municipality’s property growth factor,” the report explains. “The property growth factor is different for each town; it is a measure of the new development occurring within the municipality’s borders.”

In April, the Democrat-controlled legislature passed a new bill repealing the property tax cap which Gov. Janet Mills (D) then signed into law.