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.

What happens if my property is foreclosed?

If you are not able to stop the foreclosure process and the town gets ownership of your property, the town will probably try to sell it. You do have some rights in this process. If the town is planning to sell the property to anyone other than you, they must give you notice and give you the opportunity to request that they follow a public sale process. This means the town would need to:

Use a real estate agent who is not connected to the town;
Sell the property to the buyer who offers the highest price within 6 months of listing or a price that is reasonable under the professional judgment of the real estate agent;

You have 90 days from when you receive notice of the sale to request that the town follow this process. You should request this special process in writing. You write that you are requesting “ the 36 MRS 943-C(3) sales process.” If you do not request this process, the town can sell the property in whatever manner they choose, for any price, and to any buyer. The sale does not have to be public. You should request this process so that the town cannot sell the property for less than it’s worth.

What happens to the money the town gets from the sale of my property?

The town may need to pay you some of the money from the sale. The town can keep some of their costs:

All taxes owed up to the date of the sale;
Any interest owed;
The costs of the lien, foreclosure, and sale process;
Any costs the town spent maintaining the property; and
Any unpaid utilities bills.

After all of the above things are paid for, the town must give you any remaining money.

If you have questions about this process or questions about other liens or money you owe related to your property, call Pine Tree Legal Assistance.

Conclusion

Remember:

You can do something if you don't have enough money to pay your house tax.
Don't wait until the town has taken your house for back taxes. It might be too late.
Call Pine Tree Legal Assistance if you need help or have more questions.

Updated by PTLA: October, 2024