By Carolyn Zachary | January 25, 2021
Augusta – The maximum interest rate municipalities can levy on delinquent property taxes will be reduced to 6% by 2021 in view of the economic challenges associated with the coronavirus.
The state is also rejecting an additional, routine 3% penalty that Maine law can add to the interest margin, according to an announcement made Jan. 21 by Maine Treasurer Henry Beck. As a result of this measure, the permissible range for 2021 is 4% to 6%.
The municipalities usually vote at the city assembly to determine the interest rate on property taxes that are in arrears during a tax year pending full payment of those taxes.
As this represents a reduction of more than 2 points from the maximum rate of 8% for 2020, municipalities can add up to 2 percentage points to the lower end of the interest range, which corresponds to a maximum amount of 6% for delinquent taxes. According to government records, 4% to 6% is the lowest interest rate range on criminal property taxes in a year since 1991.
“We are lowering the interest rate on delinquent property taxes in light of the economic challenges Mainers is facing during the COVID-19 pandemic,” Beck said in the announcement.
“Real estate owners should make every effort to pay property tax bills to fund essential local services. However, during times of economic stress, it is not advisable to impose unnecessary penalties for late property tax payments. Mainers are concerned about keeping their homes and paying other bills Last year, some Maine communities decided not to calculate the maximum allowable, and that option remains. “
A copy of the announcement and the legal background can be found at https://tinyurl.com/y39qgko2.