I Can't Pay the Taxes on my House: What Can I Do?

Introduction 

In Maine, if you cannot pay your tax bill for the property you live on, there is something you can do. Your city or town can decide that you don't have to pay some or all of it. This is called a "poverty tax abatement."  

Did you know? If you can't pay your property taxes and don't get an abatement or set up a payment agreement with the town in which they agree not to foreclose on your house, the town can take your home and land away from you without taking you to court! Don’t put off asking for help. 

 

Where do I apply for tax abatement? 

Go to your town office or city hall. If your town doesn't have an office, ask the town clerk or a Selectman. Tell them that you need a "tax abatement" because of your low income or financial hardship. Some towns don’t know about “tax abatements.”  If the person at the town tells you they don’t know what you are talking about, call PTLA right away. 

 

What else do I need to tell the town when I apply? 

The Town should give you a form with questions. If they do not have a form, you can get one here and print it. If you contact us, we will mail you one. 

Before you fill out the form think carefully.  Get out your checkbook, your money order receipts or your debit card statements and see where your money is going. Be honest, but don’t low-ball your expenses. Make sure you keep copies of all your paperwork and receipts that you fill out and give to the town. 

On the form, you will be asked to list your: 

  • income 
  • expenses 
  • basic necessities 
  • debts 
  • property 

If the town has given you General Assistance in the past year, write that down. If you cannot work, write down why. 

 

When do I qualify for an abatement? 

If you use all of your income to pay for basic living expenses, then you should be able to get an abatement. 

Some examples of basic living expenses: 

  • rent or house payment 
  • lights 
  • heat 
  • food 
  • medicine 
  • transportation to:      
    • work 
    • medical appointments 
    • shopping 

If you cannot explain how you spend all of your money or if you spent some of your money on non-essential items, you may have a harder time getting an abatement.  If you own valuable property you could sell, you may not qualify. 

You should also apply for the Maine Property Tax Fairness Credit.  Apply to Maine Revenue Services. If you pay income taxes, you can apply at tax time. Call 626-8475  for more information.  TTY: 287-4477.  If you get refund money, use it toward your tax bill, and ask your town to abate the rest. 

 

What happens after I apply? 

The town has 30 days to decide what to do. During that time, they may hold an informal hearing. It must be kept private. At the hearing, they may ask you more questions about what you can pay. After the 30 days, they must tell you if you must still pay the taxes. They must give you their decision in writing. It must give you reasons. 

What if I don't hear from the town in 30 days? 

Call PTLA. We may be able to help you get the town to decide. 

 

What do I do if the Town turns me down? 

You have 60 days try to change the decision (appeal). To appeal, you must send a letter to a higher authority, asking for a new decision. It can be a simple letter. Ask someone to help you if you need help. Your written decision from the town should tell you where to send the letter. If it doesn't, call PTLA for help. Next, you will be told when and where and go to an appeal hearing. 

At the hearing, be prepared to talk about your income and budget. The people who hear your appeal have 60 days total (from the date of your letter) to make a new decision. 

 

What can I do if I am still told that I have to pay the tax? 

You can appeal the second decision to the Maine Superior Court. You must do this within 30 days after you got the second decision. If you do not receive this second written decision within 60 days, then your appeal is considered denied. In this case, your appeal deadline is 90 days from the date of your hearing. If you've gotten this far and want to appeal again, call PTLA right away for help. 

Appeals to the Court are hard to do even if you have a lawyer.  Ask for help before it gets this far. 

 

What is the property tax foreclosure process? 

If you don't get an abatement, and don't pay your property taxes, the town may foreclosure on your property. The first step they will take is filing a lien on your property. This is often done before you even apply for an abatement. 

A property tax foreclosure is an automatic process.  This means your town does not have to bring you to court to foreclose on your home. Eighteen months after your town files the tax lien with the registry of deeds the town owns your home if they have followed the process right.  But, the town must send you certain notices throughout the process. Don’t ignore the notices – get help! 

Your town has to send you a notice between 8 to 12 months after your taxes were originally due.  That notice will demand payment within 30 days of sending you the notice.  Your town can leave the notice at your home, or mail it certified mail return receipt requested.  If you fail to pay your taxes within those 30 days then your town can put a lien on your home. 

Your town must send you its last notice 30 to 45 days before the foreclosure date.  The notice will tell you the exact date of the foreclosure.  Your town can leave the notice at your home, or mail it certified mail return receipt requested.  If your town fails to send you the notice at the proper time, you will have 30 days to redeem the tax lien after receiving the notice. It is important to remember that the law does not require that you receive this notice. If the town has sent it to you, that is likely all that is required.  

  

Other Questions You May Have 

Don't I need a lawyer from the beginning? 

No. You can apply for the abatement on your own. You can also go to the first informal hearing (if the Town has one) on your own. Try to get a lawyer before you go to the appeal hearing. If you think you need help at any stage, call PTLA. 

How many years of taxes can be put aside? 

The town must let you apply for up to 3 years of back tax bills. If you owe more than 3 years, ask the Town if they will forgive all of the taxes that you owe. Be prepared to give them your income and budgets for each year. 

If I have a mortgage, can the town make the bank or FMHA pay my tax? 

No. You would still have a debt that you can't pay. Sometimes your bank pays your taxes on its own, to protect its interest in your property.  If this happens, you can still apply for an abatement so that you can repay the bank.  If you don't do this, the bank will add the amount of the tax to your debt.  This will increase your debt and may give the bank the right to foreclose on your mortgage. 

Here are some other ways may to get help with your house taxes

You may also be able to get more tax relief if you are: 

  • blind 
  • a wartime veteran and at least 62 years old 
  • the widow or minor child of a wartime veteran 

Apply at your town office, or download the forms here. For more information on property tax exemptions, visit the Maine Revenue Services website. 

 

Conclusion

Remember: 

 

 

July 2022
PTLA #623