tax hike for seasonal property owners? (Augusta, Otis: sales, real estate, how much)

[patsfan]

A recent post by (Acadialion?) mentioned a new tax on non-resident property owners of seasonal property. Forrest thought this may be incorrect. Does anyone know the facts on this. Being a seasonal property owner and a resident it is of interest. I have to say...I'm not a huge fan of taxing our non-resident seasonal owners out the market and sending them elsewear with their dollars. They are already paying through the nose for schools they are not sending children to. Small towns like Otis for example have found the golden goose, it would unwise for the State to squeeze the goose to tight.Thanks for any insight you may have into this.

[Acadianlion]

Taxation of seasonal residences owned by non-Maine residents are coming under scrutiny by the legislature. While I am not sure that the legislature will actually end up establishing a different taxation scheme for non-resident seasonal property owners there is a plan afoot to do this, and I suspect that if it in fact never really happens, it will be through the action of the courts.

Under Maine law, real estate must be assessed to at least 75% of fair market value. Over the past ten years, waterfront property has skyrocketed in value. Thus the taxes collected for such property have skyrocketed as well. It seems now that the reasoning for a lot of seasonal property owned by non-Maine residents should be taxed differently than year round residents occupied by Maine residents. This is already being done in Maine to some extent with the "homestead exemption" that reduces the property taxes for Maine residents at their primary residence by a smidgen.

The theory is that seasonal, non-resident owned property is in fact a luxury item, and should be taxed as such.

As far as this being somehow unfair to those who come here to recreate, I doubt many in Augusta will find much sympathy for folks who come here from away and make no year round contribution to the financial welfare of the state. Of course the easiest way for people to avoid this kind of taxation, is for them to become registered voters in Maine. Most people who own seasonal residences here do not do that.

Maine is going to increase the meals and lodging tax to 10%, too. There is a lot of screaming about that from the food and lodging industry, but the ten percent meals and lodging tax isn't as high as it is elsewhere.

And Maine needs the money.

[7th generation]

I hope this is not the case and can't imagine it ever happening. Alot of properties in my town and surrounding communities (near Sunday River), are owned by out of staters. They contribute alot of cash to businesses here and don't have any children in the schoolsThis would be economic suicide for our State and would pray our powers to be will think this through carefully. As I stated before, we welcome all newcomers and tourists to "The Great State of Maine"!

[Submariner]

The only thing that I have found is this:

http://www.mecep.org/news_detail.asp?news=183

A proposed cap on property assessments for your primary home.

It would require a change in the constitution.

It does not say anything about any new taxes.

It does not say anything about raising any taxes.

It is about the possibility of limiting how much property assessments can go up each year, for your primary home. The cap would match the national inflation rate.

This is:

a proposal that was defeated several times in the last legislative session and already is drawing fire.

Which does not sound at all like what Acadianlion has been stating.

[Acadianlion]

Originally Posted by forest beekeeper

The only thing that I have found is this:

http://www.mecep.org/news_detail.asp?news=183

A proposed cap on property assessments for your primary home.

It would require a change in the constitution.

It does not say anything about any new taxes.

It does not say anything about raising any taxes.

It is about the possibility of limiting how much property assessments can go up each year, for your primary home. The cap would match the national inflation rate.

This is:


Which does not sound at all like what Acadianlion has been stating.

It is not. The proposal is to assess newly acquired properties or newly constructed properties that are intended for seasonal, non-resident use. Thus if someone buys a building lot in "X" town, and builds a new home for seasonal use, it will be taxed differently than a similar home owned and occupied by a year round legal resident.

I doubt that properties already owned by out of staters can be touched in the same way, so I assume that the legislature will tackle the concept of redefining the property tax assessment process for new ownership or construction only.

I will try to find the actual LD number when I have some time. It will be on the State website, but it does take a bit of effort to read through the hmoungous pile of nonsense activity that th elegislature goes through every session. The enormous inefficiency of our state government is another issue that should be aired here, also. Maybe I'll start a thread about that also.

[patsfan]

I remember reading this 'Acadia". It showed up in the paper not to long ago. The state proposed as you said a higher tax on new transfers and construction. Trying to keep skyrocketing prices down for residents who stay in their homes. I remember when I read it thinking it wouldn't help our real estate sales or new construction projects, which all create jobs. New taxes are never good of course, but as long as they spend like drunken sailors on leave that is what we'll have. Thanks all for the response.

[Coaster]

Acadia is talking about a proposal that was offered in January to tax seasonal properties at a different rate than year-round residences, under the assumption that most seasonal homes are owned by out-of-staters who can afford higher taxes. (Some of the Canadian provinces have a similar scheme. ) It ignored the fact that many Mainers also have summer camps. It involved freezing primary home valuations for as long as you owned the home, but paying something like five years worth of back taxes based on the new value when you sold it. And the new owners would pay property taxes based on the purchase price of the home. Meanwhile, vacation and business properties would continue to pay taxes based on current market values.

The only problem was that it is wildly unconstitutional under both the Maine and US constitutions, as well as being uncommonly stupid. It died an early death.

Some legislators suggested increasing the homestead exemption, but that seems to have fallen by the wayside as well.

[Acadianlion]

Originally Posted by Coaster

The only problem was that it is wildly unconstitutional under both the Maine and US constitutions, as well as being uncommonly stupid. It died an early death.

Some legislators suggested increasing the homestead exemption, but that seems to have fallen by the wayside as well.

Well, it actually has not "died and early death". What will happen is that there will be some sort of "impact" fee assessed on newly developed seasonal property that is not owned by Maine residents. That will not have trouble passing the "constitutionality" test, as it is already done.

Maine owned property...that is, seasonal and year round property held for residential purposes by Maine residents will be taxed normally.

Whether or not the increase in the Homestead exemption passes is immaterial, because the State is NOT paying its share of the exemption at this point at all. Thus the burden of the homestead exemption on local towns results in an increase in the base mil rate for the town. Thus the state giveth and the towns have to taketh away. This is much the same situation as exists with the State not paying to the towns what it is supposed to pay as its contribution to local educational costs, which again leads to higher mil rates in the local towns. Most small towns that have schools are NOT towns, so much as school districts.

[Submariner]

But who knows which property has a Maine resident owning it?

When you purchase land in Maine, nobody asks about your state of residency.

When you pay your property taxes nobody asks about your residency.

[Acadianlion]

I would expect that the deed filing process will include a questionnaire, don't you?