Libby introduces bill to expand Homestead Exemption tax program

AUGUSTA — Legislation submitted by Senate Majority Leader Nate Libby, D-Lewiston, would increase Maine’s Homestead Tax Exemption Act. LD 1172, “An Act To Provide Direct Property Tax Relief to Homeowners by Increasing the Homestead Exemption,” received a public hearing before the Legislature’s Taxation Committee on Tuesday.

“This bill provides much needed relief to both Maine residents and Maine municipalities,” said Sen. Libby. “In recent years — in recognition that Mainers are drowning in ever-increasing property taxes — we’ve raised the Homestead Exemption. But property taxes remain disproportionately high, as compared with other states.”

The Homestead Exemption is a state-funded program providing direct property tax relief to Maine homeowners. People only qualify for the Homestead Exemption if they are a permanent Maine resident and the home is their permanent residence. The state then reimburses municipalities for a portion of the foregone revenue that would have been collected if the resident had not claimed the exemption.

This bill increases the total exemption amount under the homestead property tax exemption program from the current $20,000 to $30,000 for the tax year beginning April 1, 2020, and to $40,000 for tax years beginning after April 1, 2021. LD 1172 also increases the reimbursement rate by the state to municipalities from 62.5 percent to 75 percent, beginning with the 2020-2021 tax year.

The bill faces further action in the committee and votes before the full Maine Senate and House.