Cape Elizabeth taxpayers will see a 3.94 percent increase in their taxes, unless they qualify for the homestead exemption.
Homeowners who qualify for the exemption will see a much smaller increase in their tax bill and some homeowners will even see a decrease.
According to the $27 million town budget that is expected to be adopted by the Town Council at their meeting at 7:30 p.m. Monday, May 9, at Town Hall, homeowners who have a home valued at $360,000 and qualify for the Homestead Exemption will see their property taxes increase by 0.8 pecent, while a homeowner with a home valued at $251,000 will see their tax bill decrease by 0.5 percent.
Homeowners who qualify for the exemption and have homes valued at $520,000 to $1 million will see their taxes increase 1.8 percent and 2.8 percent, respectively.
To qualify for the exemption, the homeowner must be a legal resident of Maine, have owned and occupied a homestead in Maine for at least 12 months prior to April 1 and have the stated homestead listed as their permanent residence.
Unlike previous years when the homestead exemption was based on property value and homeowners received $2,500 to $7,000 as an exemption, the new exemption, part of the state’s new property tax relief bill, grants a $13,000 exemption to homeowners regardless of the value of their home. In Cape Elizabeth, that translates to a $208 reduction in people’s tax bills.
While the state pays for half the exemption, the individual municipalities pay for the other half. In Cape Elizabeth the tax rate will increase by 20 cents to fund the town’s $248,300 contribution to the exemption.
That 20 cents is part of an entire tax rate increase of 60 cents, to $15.94 per thousand. The largest portion of the tax-rate increase is a 29-cent increase for the school department. The tax rate is based on a town valuation of $1.3 billion.
The FY 2006 budget that the Town Council is expected to adopt on Monday includes an $8 million municipal budget, $17.5 million school budget, $889,000 county assessment and a $911,000 community services budget.
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