Tax Discount for Homeowners?

Training for: Legal Notes

Question: Can we offer a tax discount for homeowners only?

Answer: No. State law does not authorize it, nor is there any municipal “home rule” in the field of taxation (see Me. Const. art. IX, § 9). (We’ve given the same answer to a similar inquiry about a tax discount for seniors citizens, see “Tax Discount for Seniors?,” Maine Townsman, Legal Notes, December 2012.)

Maine law does authorize the municipal legislative body (town meeting or town or city council) to give a discount (the statute unfortunately uses the term “abatement,” which is grossly misleading) of up to 10% to taxpayers who pay in full on or before a certain date, but this must be offered, if at all, to all taxpayers regardless of the type of taxpayer or the class of property (see 36 M.R.S.A. § 505(5)). Most municipalities that offer a tax discount set the amount in the 2-3% range.

A suitable warrant article would read: “To see if the town will vote that all taxpayers who pay all taxes due and payable for the current year prior to __________, 20__ shall be entitled to a discount of __% thereon.”

Maine law also authorizes a municipality, by ordinance, to establish its own “homestead” property tax assistance program (see 36 M.R.S.A. § 6232) – akin to but in addition to the State’s Property Tax Fairness Credit. Only a few municipalities have adopted such a program, however, due no doubt to the fact that it must be entirely locally funded. (By R.P.F.)

Question: Can we offer a tax discount for homeowners only?

Answer: No. State law does not authorize it, nor is there any municipal “home rule” in the field of taxation (see Me. Const. art. IX, § 9). (We’ve given the same answer to a similar inquiry about a tax discount for seniors citizens, see “Tax Discount for Seniors?,” Maine Townsman, Legal Notes, December 2012.)

Maine law does authorize the municipal legislative body (town meeting or town or city council) to give a discount (the statute unfortunately uses the term “abatement,” which is grossly misleading) of up to 10% to taxpayers who pay in full on or before a certain date, but this must be offered, if at all, to all taxpayers regardless of the type of taxpayer or the class of property (see 36 M.R.S.A. § 505(5)). Most municipalities that offer a tax discount set the amount in the 2-3% range.

A suitable warrant article would read: “To see if the town will vote that all taxpayers who pay all taxes due and payable for the current year prior to __________, 20__ shall be entitled to a discount of __% thereon.”

Maine law also authorizes a municipality, by ordinance, to establish its own “homestead” property tax assistance program (see 36 M.R.S.A. § 6232) – akin to but in addition to the State’s Property Tax Fairness Credit. Only a few municipalities have adopted such a program, however, due no doubt to the fact that it must be entirely locally funded. (By R.P.F.)