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Important points to consider when buying land. Taxes In Maine local municipalities assess taxes on property. Each town sets their own tax rate (also called a mil rate) based on the revenue requirements for the town. The mil rate is expressed as $XX amount per thousand dollars of assessed property value. For example, the mil rate in the town of Freeport might be $17.90 per thousand. This means that an individual property owner would be taxed $17.90 per year for every $1,000 of their property's assessed value. Information about property assessments and mil rates are available at your town office. The Tree Growth Tax Law allows woodland owners to sign a contract with the state. Under the contract, the state values a landowner's property according to its current use, i.e. timber production. In return, the landowner must maintain property as productive forest land. Once you are in the Tree Growth program, your commercial forest land is taxed based on its productivity of timber growth and not the land's development potential or fair market value. In most cases this makes for a much lower property tax. If the land has little potential for any use besides timber growth, the tax savings may be very small or not at all. The higher the property values in your town, the greater the savings. However, there is a hitch. Substantial tax liability accumulates and become due when property is removed from the tree growth tax program. |
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