Maine treasurer announces restrictions for delinquent property tax rates

(The Center Square) – The Maine State Treasurer’s Office has announced the interest rate on delinquent 2021 property taxes will get limited to 6%, a number that reflects the economic difficulties many residents are facing amid the COVID-19 pandemic.

“This is the interest rate at which property owners who are delinquent on their property tax payments must pay to their municipality, until those taxes are paid in full,” Nick Murray, outreach coordinator with the Maine Policy Institute, told The Center Square by email.

Murray noted that the Wall Street Journal prime rate, which is based on lending rates by the 30 largest banks, is generally used as a benchmark, with the maximum delinquency rate then set about 3% higher.

For the taxable year 2021, the Maine State Treasurer’s Office has set that range between 4% and 6%, Murray said, essentially opting to limit municipalities from charging an extra percentage point on delinquent taxes when compared to other years.

“Towns may only set their interest rate on delinquent payments within that range for 2021. Since the WSJ prime rate is currently 3.25%, the state rounds that up to 4%, and for this year, only adds 2% to it to configure the range,” Murray said.

Murray said he believes the treasurer is allowing for those suffering right now because of COVID-19.

“My key takeaway from this move is that the treasurer recognizes that many people in the economy are suffering right now,” Murray said. “Though he likely spared some delinquent payers some additional interest, the rate is so low largely because of what the Federal Reserve has set.”

Property owners need to make every effort to pay the taxes, which fund vital local services, Maine state Treasurer Henry Beck said in a news release.

“Beck understands the hardship that many property owners are facing right now, but it is important to note that the current economic malaise was made even worse by Governor Janet Mills’ unilateral emergency orders, which continue to threaten the survival of hundreds of Maine businesses and their employees,” Murray said.

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