An Act To Reduce Property Taxes through a Municipal Tax Deferral Program
Maine Legislature, Session 123, LD 1613
Committee: Taxation
Sponsors: GILES, SULLIVAN

Legislative Document 
No. 1613 
H.P. 1135 
House of Representati ves, March 21, 2007 
An Act To Reduce Property Taxes through a Municipal Tax 
Deferral Program 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative GILES of Belfast. 
Cosponsored by Senator SULLIVAN of York. 
Printed on recycled paper 
7rJ~/J1.~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA c. 908-A is enacted to read: 
CHAPTER 908-A 
MUNICIPAL PROPERTY TAX DEFERRAL PROGRAM 
§6271. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Base value. "Base value" means 50% of the Consumer Price Index multiplied by 
the sum of the value determined under paragraph A and any improvements as determined 
under paragraph B. 
A. The value of the homestead is the assessed value as of the later of the following: 
(1) The assessed value as recorded in the tax records for the 1996 property tax 
year of the municipality; and 
(2) The last date of transfer of the title to the homestead, unless that transfer was 
to a family member or trust. 
B. 
The value of improvements to the property is the assessed value of those 
improvements since the later of the 2 events specified in paragraph A. 
For purposes of this subsection, "Consumer Price Index" has the same meaning as in 
section 5402, subsection 1. 
2. Deferred orooertv taxes. "Deferred property taxes" means the property taxes 
that would have been imposed on a homestead above the base value but for this chapter 
multiplied by the lesser of: 
A. Three years; and 
B. The number of years since the last title transfer of the homestead to a person other 
than a family member or trust. 
3. Family member. "Family member" means a parent, spouse, child, sibling or 
grandchild of the taxpayer. 
4. Homestead. "Homestead" means the owner-occupied principal dwelling, either 
real or personal property, owned by the taxpayer and up to 10 contiguous acres upon 
which it is located. If the homestead is located in a multiunit building, the homestead is 
the portion of the building actually used as the principal dwelling and its percentage of 
the value of the common elements and of the value of the tax lot upon which it is built. 
The percentage is the value of the unit consisting of the homestead compared to the total 
value of the building exclusive of the common elements, if any. 
I 
II 
5. 
Municipal assessor. 
"Municipal assessor" means mean a person chosen, 
appointed or designated by a municipality or the officers of that municipality to collect 
property taxes due a municipality or that person's successor in office. For purposes of 
this chapter, the municipal tax assessor for the unorganized territory is the State Tax 
Assessor. 
6. Municipality. "Municipality" means the municipality in which the homestead is 
located. 
7. Tax-deferred property. "Tax-deferred property" means the property upon which 
taxes are deferred under this chapter. 
8. Taxes. "Taxes" or "property taxes" means ad valorem taxes, assessments, fees 
and charges entered on the assessment and tax roll. 
9. Taxpayer. "Taxpayer" means an individual who has filed a claim for deferral 
under this chapter or individuals who have jointly filed a claim for deferral under this 
chapter. 
10. Trust. "Trust" means an inter vivos trust that was created by and is revocable bv 
an individual. 
§6272. Deferral of tax on homestead; joint election; filing claim 
1. Filing claim. Subject to section 6273, an individual or 2 or more individuals 
jointly may elect to defer the property taxes on their homestead by filing a claim for 
deferral with the municipal assessor after January 1 st but no later than April 1 st of the 
first year in which deferral is claimed. The municipal assessor shall determine if the 
QI9pertv is eligible for deferral. Claims from applicants may not be filed pursuant to this 
chapter prior to January I, 2008. 
2. Property tax deferral. When the taxpayer elects to defer property taxes for any 
year bv filing a claim for deferral under subsection 1, that election has the effect of: 
A. Deferring the payment of the property taxes levied on the assessed value of the 
homestead above the base value for the municipal fiscal year beginning on or after 
April 1 st of that year; 
B. Continuing deferral of the payment by the taxpayer of any property taxes deferred 
under this chapter for previous years that have not become delinquent under section 
6279; and 
C. Continuing the deferral of the payment by the taxpayer of anv future property 
taxes deferred under this chapter for as long as the provisions of section 6273 are 
met. 
3. Guardian compliance. If a guardian or conservator has been appointed for an 
individual otherwise qualified to obtain deferral of taxes under this chapter, the guardian 
or conservator may act for that individual in complying with this chapter. 
4. Trustee compliance. If a trustee of an inter vivos trust that was created by and is 
revocable by an individual who is both the trustor and a beneficiary of the trust and who 
is otherwise qualified to obtain a deferral of taxes under this chapter owns the fee simple 
estate under a recorded instrument of sale, the trustee may act for the individual in 
complying with this chapter. 
5. Spouse not required to claim. This section may not be construed to require a 
spouse of a taxpayer to file a claim jointlv with the tax..lli!YYr even though the SpO_l!.5C l11ay 
be eligible to claim the deferral jointlv with the taxpayer. 
!i 
.... Appeal. Anv person aggrieved by the denial of a claim for deferral of homestead 
0 
~rtv taxes or disqualification from deferral of homestead-llioperty taxes_may file an 
appeal of the municipal ass~5sor's determination, within 30 days of notification cf denial 
or disqualification Qy the municipal assessor, \viHL.the State Board of Property- Ta;;,: 
Review as provided in chapter 101, subchapter 2-A._ 
§6273. Property entitled to deferral 
In order to qualify for tax deferral under this chapter, the property must meet all of 
the following requirements when the claim is filed and continue to meet these 
requirements as iong as the pavment of taxes by the taxpayer is deferred. 
1. Claimant's homestead. The propertY must be the homestead of the taxpaveI:. who 
files the claim for deferral, except for a taxpaver required to be absent from the 
homestead bv reason of health. 
2. Fee simple estate. The person claiming the deferral must, solelv or together with 
the person's spouse, own the fee simple estate or be purchasing the fee simple estate 
under a recorded instrument of sale, or 2 or more persons must together own or be 
purchasing the fee simple estate with rights of survivorship under a recorded instrument 
of sale if all owners live in the homestead and if all owners apply for the deferral jointly. 
3. No prohibitions. There may not be a prohibition to the deferral of property taxes 
contained in a provision of federal law, rule or regulation applicable to a mortgage, trust 
deed, land sale contract or conditional sale contract for which the homestead is security. 
§6274. Claim forms; contents 
1. Administration. A taxpayer's claim for deferral under this chapter must be in 
writing on a form supplied by the municipality and must: 
A. Describe the homestead; and 
B. Have attached any documentary proof required by the municipal assessor to show 
that the requirements of section 6273 have been met. 
2. Statement verification. There must be annexed to the claim a statement verified 
by a written declaration of the applicant making the claim to the effect that the statements 
contained in the claim are true. 
§6275. Municipal liens against tax-deferred property 
1. Lien. The lien provided in section 552 must continue for purposes of protectil}g 
the municipality's deferred tax interest in tax-deferred property. 
A. 
When it is determined that one of the events set out in section 6278, subsection 1 
or 2 has occurred and that a property is no longer eligible for property tax deferral 
under this chapter, the municipal assessor shall send notice by certified mail to the 
owner, or the owner's heirs or devisees, listing the total amount of deferred property 
taxes and demanding payment on or before April 30th of the year following the tax 
year in which the circumstances causing withdrawal from the provisions of this 
chapter occur. 
B. When the circumstance listed in section 6278, subsection 3 occurs, the payment of 
deferred property taxes is due as a condition of the sale or transfer within 5 days of 
that sale or transfer. 
C. When the circumstance listed in section 6278, subsection 4 occurs, the amount of 
deferred property taxes is due and payable 5 days before the date of removal of the 
property from the State. 
If the deferred property tax liability of a property has not been satisfied by the April 30th 
demand date, the municipal assessor shall, within 30 days, record in the registry of deeds 
in the county where the real estate is located a tax lien certificate signed by the municipal 
assessor or bearing the assessor's facsimile signature, setting forth the total amount of 
deferred property tax liability, a description of the real estate on which the tax was 
deferred and an allegation that a tax lien is claimed on the real estate to secure payment of 
the deferred property taxes, that a demand for payment of the deferred property taxes has 
been made in accordance with this section and that the deferred property taxes remain 
unpaid. 
At the time of the recording of the tax lien certificate in the registry of deeds, the 
municipal assessor shall send by certified mail, return receipt requested, to each record 
holder of a mortgage on the real estate, to the holder's last known address, a true copy of 
the tax lien certificate. The cost to be paid by the property owner, or the owner's heirs or 
devisees, is the sum of the fees for recording and discharging of the lien as established by 
Title 33, section 751, subsection I, plus $13. Upon redemption, the municipal assessor 
shall prepare and record a discharge of the tax lien mortgage. The lien described in 
section 552 is the basis of this tax lien mortgage procedure. 
The filiVg of the tax lien certificate, provided for in this subsection, in the registry of 
deeds creates a mortgage on the real estate to the municipality filing the tax lien and has 
priority over all other mortgages, liens, attachments and encumbrances of any nature and 
gives to that municipality all rights usually instant to a mortgage, except that the 
mortgagee does not have any right of possession of the real estate until the right of 
redemption expires. 
Payments accepted during the redemption period may not interrupt or extend the 
redemption period or in any way affect the foreclosure procedures. 
2. Foreclosure. If the mortgage, including interest and costs, is not paid within 12 
months of the date on which the certificate was filed in the registry of deeds, as provided 
in this section, the mortgage is deemed foreclosed and the right of redemption expired. 
3. Inventory. The filing of the certificate in the registry of deeds is sufficient notice 
of the existence of the mort.gage. Whenever a municipality acquires title to real estate 
under this chapter, the municipal assessor shall cause an inventory to be made of all such 
real estate. The inventory must contain a description of the real estate, amount of accrued 
taxes by years and any information necessary to the administration and supervision of the 
real estate. 
4. Sale; municipal authorization. After authorization by the governing body of the 
municipality, the municipal assessor shall: 
A. Sell or convey any real property acquired pursuant to this section; 
B. In all cases of sales, give public notice of the proposal to sell the real estate except 
sales to former owners of the real estate; 
C. Ask for competitive bids; and 
D. Sell to the highest bidder with the right of rejecting all bids. 
Sales of any such real estate may not be made by the municipal assessor except by 
authorization of the governing body of the municipality. 
The supervision, administration, utilization and vindication of the right of the 
municipality in any such real estate is vested in the municipal assessor until the title is 
conveyed or otherwise disposed of by the municipality. 
5. 
Foreclosure receipts. Following the sale by the municipal assessor of real 
property acquired through the tax lien certificate procedure outlined in this chapter, all 
claims of the municipality evolving from the deferral of property taxes pursuant to this 
chapter are satisfied, as well as any tax delinquencies relative to the property in question 
in the municipality where located. The residual amount resulting from the sale of the 
property is to be returned to the former owner or to the owner's heirs or devisees. 
§6276. Recording liens in county; recording constitutes notice of municipal lien 
1. Recording of liens. Each municipality in which there is tax-deferred property 
shall cause to be recorded in the mortgage records of the county a list of tax-deferred 
properties of that municipality. The list must contain a description of the property as 
listed in the municipal valuation together with the name of the owner listed on the 
valuation. The list must be corrected annually to reflect the addition or deletion of 
deferred properties as well as partial payments received. 
2. 
Notice of recording. The recording of the tax-deferred properties under 
subsection 1 is notice that the municipality claims a lien against those properties in the 
amount of the deferred property taxes together with any fees paid to the county register of 
deeds in connection with the recording, release or satisfaction of the lien, even though the 
amount of taxes or fees is not listed. 
.. 
§6277. Annual notice to taxpayer 
1. 
Annual deferral notice. 
On or before December 15th of each year, the 
municipality shall send a notice to each taxpayer who has claimed deferral of property 
taxes for the current tax year. The notice must: 
A. 
Inform the taxpayer that the property taxes have been deferred in the current 
year; 
B. 
Show the total amount of deferred property taxes remaining unpaid since initial 
application for deferral; 
C. Inform the taxpayer that voluntary payment of the deferred property taxes may be 
made at any time to the municipality; and 
D. 
Contain any other information that the municipality considers necessary to 
facilitate administration of this chapter, including, but not limited to, the right of the 
taxpayer to submit any amount of money to reduce the total amount of the deferred 
property taxes. 
2. Notice mailed. The municipality shall give the notice required under subsection 1 
by mail sent to the residence address of the taxpayer as shown in the claim for deferral or 
as otherwise determined by the municipality to be the correct address of the taxpayer. 
§6278. Events requiring payment of deferred property tax 
Subject to section 6280, all deferred property taxes become payable as provided in 
section 6279 when: 
1. Death of claimant. The taxpayer who claimed deferment of collection of property 
taxes on the homestead dies or, if there was more than one claimant, the survivor of the 
taxpayers who originally claimed deferment of collection of property taxes under section 
6272 dies; 
2. Claimant moves. The tax-deferred property is no longer the homestead of the 
taxpayer who claimed the deferral, except in the case of a taxpayer required to be absent 
from that tax-deferred property by reason of health; 
3. Sale of property. The property with respect to which deferment of collection of 
taxes is claimed is sold or a contract to sell is entered into or some person other than the 
taxpayer or a family member of the taxpayer who claimed the deferment becomes the 
1 
owner of the property; or 
4. 
Removal of home. The tax-deferred property, a mobile or floating home, IS 
moved out of the State. 
§6279. Time for payments; delinquencies 
Whenever any of the circumstances listed in section 6278 occurs: 
1. Continuation of assessment year. The deferral of taxes for the assessment year 
in which the circumstance occurs continues for that assessment year; 
2. Deferred property taxes due. The amount of deferred property taxes is due and 
payable to the municipality as a condition of the sale or transfer within 5 days of the sale 
or transfer, except as provided in subsection 3 and section 6280; 
3. Out-of-state move. Notwithstanding the provisions of subsection 2 and section 
6282, when the circumstance listed in section 6278, subsection 4 occurs, the amount of 
deferred taxes is due and payable 5 days before the date of removal of the property from 
the State; and 
4. Delinquency. Ifthe amounts falling due as provided in this section are not paid on 
the indicated due date or as extended under section 6282, those amounts are considered 
delinquent as of that date and the property is subject to foreclosure as provided in section 
6275. 
§6280. Election by spouse or other family member to continue tax deferral 
1. 
Continuation by family member. When one of the circumstances listed in 
section 6278, subsections 1 to 3 occurs, the spouse or other family member who did not 
or was not eligible to file a claim jointly with the taxpayer may continue the property in 
its tax-deferred status by filing a claim within the time and in the manner provided under 
section 6272 if the property is the homestead of the spouse or other family member of the 
taxpayer and meets the requirements of section 6273, subsection 2. 
2. Filin&: extension. Notwithstanding the requirement in section 6272 that a claim be 
filed no later than April 1 st, if the municipality determines that good and sufficient cause 
exists for the failure of a spouse or other family member to file a claim under this section 
on or before April 1 st, the claim may be filed within 90 days after notice of taxes due and 
payable under section 6279 is mailed or delivered by the department to the taxpayer, 
spouse or other family member. 
§6281. Voluntary payment of deferred tax and interest 
1. 
Payments. All payments of deferred property taxes must be made to the 
municipality. 
2. Taxes. Subject to subsection 3, all or part of the deferred property taxes may at 
any time be paid to the municipality by: 
A. The taxpayer or the spouse of the taxpayer; 
B. The next of kin of the taxpayer, heir at law of the taxpayer, family member other 
than the spouse or any person having or claiming a legal or equitable interest in the 
property; or 
C. If the property is transferred to someone other than a family member or trust, the 
buyer of the property. 
3. Notice of payment. A person listed in subsection 2, paragraph B may make the 
payments under this section only if an objection is not made by the taxpayer within 30 
days after the municipality deposits in the mail notice to the taxpayer of the fact that the 
payment has been tendered. 
4. Payment application. Any payment made under this section must be applied 
against the deferred property taxes. This payment does not affect the tax-deferred status 
of the property. Unless otherwise provided by law, this payment does not give the person 
PID'-ing the deferred property taxes any interest in the property or any claim against the 
estate, in the absence of a valid agreement to the contrary. 
5. Lien discharge. When the deferred property taxes are paid in full and the property 
is_no longer subject to deferral, the municipality shall prepare and record in the county in 
which the Q!:QQertv is located a lien discharge. 
§6282. Extension of time for payment upon death of claimant or spouse 
1. Payment extension. If the taxpaver who claimed a _deferraU!u.9cr this chapter dies 
or if a spouse or other family member who continued the deferral unqer sectioD-.fJ2~Q 
dies. the municipality may extend the time for pifrment of the deferred proQert,'--.1'L''''~ 
becoming due and payable under section 6279, subsection 2 if: 
1-l 
A. The homestead property becomes properl\ of an individual or inc!i~iduals: 
! 5 
( 1 ) B\ inheritance or devise: or 
f2l If the individual or individuals ar£Jl~rLQr devi~\.'UL11iLe_ Cp~ltS~)~ 
I 7 
settlement of the estate: 
is 
B. An individual or individuals commence occupancy of th~pertv as a l?J:i~lcip?J 
residencc on or before August 15th of the calendar year following the calend:"i~ 
of death; or 
~~,1 individual or individuals make application to the municipality for an extension 
Yl 
of time for payment of the deferred taxes and intere_~rior to Augu~LL5th_of the 
calendar year following the calendar ~ear of death. 
2. Extension terms. Subject to paragraphs A, Band C. an extension granted under 
this section must be for a period not to exceed 5 years after August 15th of the calendar 
year following the calendar year of death. The temlS and conditions under which the 
extension is granted must be in accordance with a written agreement entered into by the 
municipality and the individual or individuals. An extension granted under this section 
terminates immediately if: 
A. 
The homestead property is sold or otherwise transferred by any party to the 
extension agreement; 
B. All of the heirs or deyisees who are parties to the extension agreement cease to 
occupy the property as a principal residence; or 
C. The homestead property, a mobile or floating home, is moved out of the State. 
3. Accrued interest. During the period of extension, and until paid, the deferred 
property taxes accrue interest at the rate of 6% per annum. Interest may not accrue upon 
interest. 
For purposes of this section, "individual" does not include a family member. 
§6283. Limitations 
This chapter is not intended and may not be construed to: 
1. Foreclosure. Prevent the collection, by foreclosure, of property taxes that become 
a lien against tax-deferred property; or 
2. Land provisions. Affect any provision of any mortgage, or other instrument 
relating to land, requiring a person to pay property taxes. 
§6284. Deed or contract clauses preventing application for deferral prohibited; 
clauses void 
After October 1, 2007, it is unlawful for any mortgage trust deed or land sale contract 
to contain a clause or statement that prohibits the owner from applying for the benefits of 
the deferral of homestead property taxes provided in this chapter. Any such clause or 
statement in a mortgage trust deed or land sale contract executed after October 1, 2007 is 
void. 
SUMMARY 
This bill creates a municipal homestead property tax deferral program to defer 
indefinitely property taxes levied on the assessed value of a homestead above a certain 
amount. The value of property for purposes of assessment is the sum of: 
1. The assessed value of the homestead as recorded in the municipality as of the 
1996 property tax year or the last date of transfer, whichever occurs later; and 
2. The assessed value of any improvements made to the homestead since the last 
assessed value. 
The sum of the assessed value oflhe homestead and any improvements are multiplied 
by 50% of the Consumer Price Index to achieve the base value of the property. Taxes 
that would be assessed on the property above this base value are dcferred until the sale or 
transfer of the property to someonc other than a family member or trust. 
When the 
property is sold or transferred or is no longer the homestead of the owner or, in the case 
of a trailer or houseboat, moved out of the State, the amount of the deferred property 
taxes for the last 3 years or since the last transfer or sale, whichever period is shorter, 
must be paid. 
The program allows a spouse or other family member, such as a parent, sibling, child 
or grandchild, to continue the deferral as long as the spouse or other family member uses 
the property as a homestead. During the period of property tax deferral, the municipality 
holds a lien on the property against the deferred amount of property taxes.