FAQ - Assessing
How are mil rates computed?
Mil rates are determined by two components - the amount of funds required by the municipal and school budgets and the taxable valuation of the property in town.
The amount of funds required by the municipal and school budgets are the total budgets net of estimated revenue from other sources. Other revenue sources include State and Federal program funding, education subsidy, municipal revenue sharing, excise tax, and investment income. (Figure A)
The taxable valuation (Figure B) is the total value of all properties in town less values exempted from taxation. Properties fully exempted from taxation include those owned by State, Federal, or municipal governments, churches, and schools. Portions of properties may be exempted from taxation using certain State exemption programs.
Figure A divided by Figure B = Raw Mill Rate
State statute allows an addition of up to 5% of the funds requested (Figure A) - known as overlay. This amount is added for rounding purposes and to provide funding to offset the effect of tax abatements.
How are valuations determined?
An average value of an acre of land is determined based on the sales which occur in the town. Adjustments are made based on location or neighborhood. Other adjustments are made based on physical attributes of the property - wetlands, size, shore frontage.
Adjustments are made to developed property's values for water supply and waste water systems. The majority of the value of a developed property is located near and in the area of development or "base lot" - ie, around the house. Additional acreage is typically valued at a lower rate.
An average value per square foot is determined based on the sales which occur in the town. Adjustments are made for type of structure, age, and condition. Other adjustments are based on how the structure differs from the "norm" - number of bathrooms, whether it has a basement & if the basement is dry, type of heating system, etc.
When are valuations changed?
Property valuations are changed under three circumstances:
- When there is a change to the property
- A portion of the property is sold
- A structure is added or added on to.
- A structure is deleted or partially removed.
- When an "area" revaluation is done - some times the characteristics of a section of town requires that the properties contained in that area be revalued at a different interval than the entire town. Example - shoreland zoning, a municipal utilities expansion, etc.
- When a "full-town" revaluation is done - this is done approximately once every ten years. State statutue requires that towns revaluate its properties at least that often or when the town's valuation ratio drops below 70% of the State's valuation for the town. The last town-wide reval was done in two phases - land values in 2006 & building values in 2008.
Are there any ways I can reduce my taxes?
The State provides several programs which changes the basis upon which valuations are computed and several exemptions which reduce the valuation upon taxes are computed.
- Tree growth program - this program changes the basis of valuation from the number of acres to the type of forest area on the property - ie, hard wood, soft word, or mixed wood. The property must be a minumum of 10 acres and a forest management plan must be submitted for the property. A penalty must be assessed if the property is withdrawn from the program.
- Farm land program - this program changes the basis of valuation from the number of acres to a basis of income stream and the value of agricultural properies. The property must be a minimum of 5 acres and must contribute a value of $ 2,000 of agricultural resources per year. A penalty must be assessed if the property is withdrawn from the program.
- Open space program - this program reduces the valuation of a property by a percentage dependent on the use of or type of preservation applied to the property. The reduction ranges from 20-95% of valuation. A penalty must be assessed if the property no longer qualifies for inclusion in the program.
More information on these programs may be found atwww.maine.gov/revenue/propertytax/propertytaxbenefits/CurrentUseLandPrograms.htm
- Homestead exemption - this exemption applies to a person's primary residence. The owner must have owned homestead property in the State of Maine for a minimum of 12 months. The amount of the exemption is currently $ 10,000.
- Veteran's exemption - this exemption is granted to the veteran who has served in an organized war period and has reached the age of 62. The age requirement is waived if the veteran is designated as 100% disabled under Veteran's Administration guidelines. The amount of this exemption is currently $ 6,000. Parapalegic veterans may be eligible for additional exemptions. This exemption may also be granted to a veteran's widow(er), parent, or child.
- Blind exemption - this exemption is granted to an individual who is legally blind. The amount of the exemption is currently $ 4,000.
More information on these programs and the applications may be found atwww.maine.gov/revenue/propertytax/sidebar/exemptions.htm. Applications must be received on or before April 1st to be applicable for the coming assessment year.