FARMINGTON — The Select Board discussed options Tuesday to help defer the impact of property taxes on seniors and other vulnerable taxpayers, including optional town programs and one run by Maine Revenue Services.
Several options were presented to the board, with two prompting initial discussion.
Maine’s Municipal Property Tax Deferral for Senior Citizens allows eligible taxpayers to apply to their town to defer new property tax payments. If the application is approved, the town places a lien on the property, which accrues interest at up to 0.5% of the town’s delinquent tax rate.
Applicants must be at least 70, have lived in their eligible homestead for at least 10 years and have an income that is not more than 300% of the federal poverty level.
Once the property no longer qualifies for the program, usually because it has a new, nonqualifying owner, the town can claim the lien for deferred taxes, along with any interest. If a mobile home is moved out of state, the tax deferral ends and the deferred taxes must be paid.
Each town maintains a list of deferred properties with the local registry of deeds. Any applicable fees are recouped when the lien is claimed.
Along with its discussion of the state law governing the deferment program, the Select Board reviewed Chelsea’s ordinance on tax deferment. The ordinance allows the board to meet in executive session to decide whether to approve applications.
The State Property Tax Deferral Program also allows certain taxpayers to defer payment of property taxes. Town assessors accept applications and file them with Maine Revenue Services. The state then reviews the application and, if it is approved, pays the property taxes directly to the municipality for that year and for up to the two previous years.
The program is funded through a revolving account. Qualifying taxpayers must be at least 65 years old or unable to work because of a disability, among other requirements.
If the application is approved, Maine Revenue Services places a lien on the property. The lien accrues interest but does not mature until the taxpayer withdraws from the program or is disqualified. At that point, the taxpayer or the heirs of the estate must repay the deferred taxes, along with interest and costs.
“To me, that’s the program we should be looking at,” Town Manager Erica LaCroix said.
Letting the state handle the deferment program would keep the burden of auditing the process off the town’s shoulders, she said. She added that the town generally needs tax revenue when it is due, rather than years later.
“It certainly shows us trying to do something for seniors that are struggling,” Dennis O’Neil, a member of the Select Board, said. “That it may not be perfect and it may not be the only one, but it might be a good kickoff point to start with.”
Another advantage of the state program is that it does not appear to require an ordinance to participate, although LaCroix said she would need to verify that and other details with Maine Revenue Services. Participation in the state program would not necessarily preclude Farmington from running its own deferment program.
There was brief discussion about another option: a town‑maintained “tax fund” that would provide a rebate to qualifying applicants. Establishing such a fund would require an ordinance and initial seed money.
The Select Board agreed to table the issue to allow the town manager to collect more information, but members expressed interest in the Maine Revenue Services option.
“I’m anxious to see how this works out,” board Chair Matthew Smith said. “I think it’s going to be a good option for us.”
