The maximum interest rate municipalities can charge on delinquent property taxes will be reduced to 6% for 2021, the lowest level on record, in consideration of economic challenges associated with the coronavirus.

According to an announcement Jan. 21 by Maine Treasurer Henry Beck, the state is also declining an additional, routine 3% penalty that can be added to the interest rate range under Maine law. As a result of this action, the allowable range for 2021 is 4% to 6%.

Municipalities typically vote at town meeting to determine the rate of interest to be charged on property taxes that become delinquent during a taxable year until those taxes are paid in full.

Because this is a reduction of more than 2 points from the 2020 maximum rate of 8%, municipalities may add up to 2 percentage points to the low end of the interest rate range, for a maximum of 6% on delinquent taxes. According to state records, 4% to 6% is the lowest interest rate range imposed on delinquent property taxes in any year since 1991.

"We make this reduction on the interest rate for delinquent property taxes in consideration of the economic challenges faced by Mainers during the COVID-19 pandemic," Beck said  in the announcement.

"Property owners should make every effort to pay property tax bills to fund vital local services but at this time of economic stress it is not wise to add unnecessary penalties on late property tax payments. Mainers are worried about keeping their homes and paying other bills. Last year, some Maine municipalities opted not to charge the allowed maximum and this option remains."

For a copy of the announcement and the statutory background, visit https://tinyurl.com/y39qgko2.