What Happens If I Don't Pay Property Taxes in Maine?

People who own real property must pay property taxes. The government uses these taxes to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value.

When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property act as collateral for the debt. All states have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes. So, if you don't pay your real property taxes in Maine, the tax collector can sell your property, or a percentage of it, at a tax sale.

But you'll have time before and after the sale to pay off the debt and keep the property. You have two years after the sale to get current before the purchaser can get a deed to the property. However, if you fail to pay your Maine property taxes during the two-year "redemption period," you will lose your home.

Is Maine a Tax Lien or a Tax Deed State?

Again, if you don't pay your property taxes, the past-due amount becomes a lien on your home. Each state has a different tax sale process to collect delinquent taxes.

Tax Deed States

In some states, the taxing authority sells the home if the homeowner doesn't pay off the debt. However, the purchaser might not get the deed to the property immediately. Sometimes, a redemption period must expire before the buyer gets the deed.

Maine is considered a tax deed state.

Tax Lien States

In other places, the taxing authority sells the tax lien, and the purchaser must foreclose or use other procedures to get a deed to the property.

Other Tax Sale Procedures

In other states, a tax foreclosure process is used, or the taxing authority executes its lien by taking title to the home.

What Are the Consequences of Not Being Able to Pay Property Taxes in Maine?

In Maine, if your taxes are unpaid, the collector can sell your home at a public auction on the first Monday in February after the tax was assessed. (Me. Rev. Stat. tit. 36 § 1071.)

How Do Property Tax Sales in Maine Work?

At the auction, your property is sold to the bidder willing to pay the taxes and costs due and accept the smallest fractional part of your property. If no bidder offers to take only a portion of the property, the whole parcel will be sold. (Me. Rev. Stat. tit. 36 § 1074.)

The winning bidder at the tax sale gets the right to eventually get ownership of your home if you don't pay off the debt.

How You'll Get Notice of a Maine Tax Sale

Before the sale, the collector must mail you notice about the sale and post the notice.

Notice of a Property Tax Sale in Maine by Mail

At least ten days before the sale, the tax collector must notify you, the homeowner who lives at the property, about the time and place of the sale:

• in person
• by registered mail, return receipt requested, or
• by leaving a notice at your home. (Me. Rev. Stat. tit. 36 § 1073.)

Notice of a Maine Property Tax Sale by Posting

The collector must also post the notice publicly. (Me. Rev. Stat. tit. 36 § 1071.)

How to Stop a Property Tax Sale in Maine

If you want to stop a Maine property tax sale from happening, you must pay the overdue taxes, plus costs, on or before the time of sale. (Me. Rev. Stat. tit. 36 § 1074.)

Can I Get My Home Back After a Maine Tax Sale?

In Maine, you get two years after the tax sale, called a "redemption period," to redeem the home. (Me. Rev. Stat. tit. 36 § 1078.) During this time, you can pay off the delinquent taxes, which will prevent the person or entity that bought your home at the tax sale from getting ownership of your property.

But if you let the two-year redemption period expire and don't pay the debt, the purchaser will get a deed to the home. (Me. Rev. Stat. tit. 36 § 1080.)

How Much You Must Pay to Redeem Your Home After a Property Tax Sale in Maine

To reclaim your home after the tax sale, you must pay into the municipal treasury the full amount due, including taxes, costs, and charges, plus interest at the rate of 8% per year from the sale date. The treasurer will then pass the funds along to the bidder to reimburse them for the amount paid at the sale. (Me. Rev. Stat. tit. 36 § 1078.)

What Happens to My Mortgage in a Tax Sale?

Property tax liens have priority. So, a tax sale process can eliminate mortgages (and deeds of trust). If your mortgage loan isn't escrowed and you don't pay the property taxes, the loan servicer will usually pay them to stop a tax sale from happening.

Most mortgages say the lender can add the amount it paid for the taxes to your loan. You'll then have to make repayment arrangements with the servicer or potentially face a foreclosure.

What Options Do I Have If I Can't Afford to Pay My Property Taxes in Maine?

If you're having trouble paying your property taxes, you might be able to reduce your tax bill or get extra time to pay.

Getting Help

Talk to a foreclosure, tax, or real estate lawyer if you're facing a tax sale in Maine and have questions about the process or need help redeeming your property.

To learn more about property taxes and other aspects of homeownership, get Nolo's Essential Guide to Buying Your First Home by Ilona Bray, J.D., Attorney Ann O'Connell, and Marcia Stewart.