Local assessors are required by law to "ascertain as nearly as may be the nature, amount and value as of the first day of April of the real estate and personal property subject to be taxed . . ." This means that if on the 1st day of April you own property that is subject to taxation, then you are liable to pay those taxes to your municipality.

In calculating a property tax rate, the legislative body of the municipality (town meeting or council) determines the amount of revenue needed to be raised by the property tax to fund municipal services, and pay its school and county assessments. That amount is then divided by the total local assessed valuation to get the local tax rate. For example, a town that has a local assessed valuation of $100 million and needs to raise $2 million in property taxes will require a tax rate of 20 mills to do so ($2,000,000 divided by $100,000,000 equals .020).

The municipal assessor(s) calculates how much must be raised in property taxes based on what the legislative body has approved to provide the town or city services plus the two assessments levied against the town or city by the school district and county. A tax commitment listing all the property in town, its value and the taxes that are owed is then signed by the municipal officers and given to the tax collector who sends out the tax bills. In some Maine communities, property taxes are paid in one lump sum. Increasingly, municipalities have moved to collecting property taxes twice a year. Property taxes may also be escrowed and payments made as part of a homeowner’s monthly mortgage payment.

Property taxes are the primary source of revenue for Maine’s cities and towns and are used to provide local government services. Other than excise taxes on motor vehicles and boats, municipalities are barred by Maine law from using any other form of taxation to raise revenues to fund local services. Property taxes also help finance Maine's 200-plus school districts as well as county government, which together add about $1.3 billion to municipal budgets statewide.