Portland proposes property tax relief for low-income seniors
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Until the state’s property tax deferral program kicks in for tax year 2023, the city of Portland is proposing a “bridge program” to provide property tax relief for low-income seniors.
The state’s new tax deferral program is "LD1638: An Act to Help Seniors and Certain Persons with Disabilities Remain in their Homes by Providing for the Deferral of Property Taxes." It was signed into law by Gov. Janet Mills on July 19.
The state program would allow qualifying taxpayers to defer their property taxes payment until the sale of their homes at a later date. Under the program, the state would pay a municipality directly for any property taxes due, place a lien on the property, but not foreclose on the loan so the property taxpayer could remain in the home as long as necessary.
The state program goes into effect for the 2023 tax year. The application period opens in January 2022.
Portland's proposed “bridge program” is designed to provide reimbursement to eligible taxpayers until the state’s deferral program goes into place.
Reimbursement and outreach
The proposed bridge program has two components:
• An increase to the Portland Senior Tax Equity Program (P-STEP) for low-income senior property owners. The P-STEP reimbursement amounts for eligible homeowners would be doubled from a maximum of $1,200 to a maximum of $2,400 for Fiscal Year 2022 only and applied directly to property taxes due.
• Direct outreach to senior residents who might meet the criteria for deferral under LD1638. Property taxpayers who meet state criteria would be put on a customized payment plan utilizing all available tax relief resources including the P-STEP to provide a repayment bridge to FY23 when the state deferral program would be in place.
$100,000-plus cost
It’s estimated that the reimbursement component of the bridge program would carry a cost of approximately $100,000 to the city based on current P-STEP levels, although the city itself might be eligible for reimbursement with funds through the federal government’s American Rescue Plan Act.
The outreach component would require significant additional administrative effort, and the addition of a treasury staff person, to administer this program.
The city was an advocate for the state program, which was enacted earlier this summer.
“We were thrilled to advocate for these additional state programs to complement the existing programs we have so that our fixed-income senior population has aging in place options available to them,” Brendan O’Connell, the city's finance director, said in a news release.
The relief program comes at a critical time for many property owners, who saw the value of their properties increase during a citywide revaluation completed earlier this year. On average, Portland’s current valuations are approximately 70% of market value. The city’s goal was to get property assessments back to the state mandated 100% of market value standard.
New values will be reflected in the tax bills issued for FY22, to be mailed this fall.
However, over 1,700 appeals were scheduled, covering over 2,300 parcels, according to the city.
“We feel it is critical to provide as much relief in FY22 as possible due to the potential impact of the revaluation,” said O’Connell.
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