How Vermont Property Tax Works: Rates, Credits & Appeals

Property tax in Vermont works as two separate taxes billed together on one document: a municipal tax set by your town, and a statewide education tax whose rate depends on whether the property is your primary home. The education tax usually makes up the larger share, and several credits, exemptions, and filing deadlines can meaningfully change what you actually pay.

The Two Taxes on Every Vermont Bill

Every parcel in Vermont is taxed twice. Your municipality sets its own rate to fund local services like roads, fire departments, and town government. The state layers on an education property tax that applies to all real property, with the rate depending on how the property is classified.¹

There are two education tax categories. A homestead is the dwelling you own and occupy as your permanent residence, plus the land around it. Everything else is nonhomestead: vacation homes, rentals, commercial buildings, and undeveloped land not enrolled in a special program.

The nonhomestead education rate for 2026 is a flat $1.703 per $100 of value, uniform statewide. The homestead rate is not flat. Each town’s homestead rate is built from how much its school district spends per pupil: per-pupil spending is divided by the statewide property yield of $8,596 and multiplied by the base homestead rate of $1.00 per $100.² A town spending $14,000 per pupil would produce a homestead education rate of roughly $1.63 per $100 before further adjustments. The final rate on your bill also carries a Common Level of Appraisal adjustment that accounts for how closely your town’s assessed values track actual market values.

Your bill itemizes education and municipal taxes as separate line items, even though they arrive together.¹

Claim the Homestead Rate by April 15

The homestead rate is not automatic. You have to file a Homestead Declaration every year by April 15, on Form HS-122.³ Miss it, and your property gets taxed at the nonhomestead rate, which is almost always higher. File late if you have to, but a timely filing is what gets you classified as a homestead on the Grand List.

To qualify, you must own the property and occupy it as your primary residence on April 1 of the filing year. Any portion of the home that you rent out doesn’t count, and if more than 25 percent of the floor space is used for business, the business portion loses homestead status.¹

How Your Property Gets Valued

Local officials called listers (some towns use “assessor”) determine the fair market value of every property in the municipality. Under Vermont law, that value is the price the property would bring on the open market between a willing buyer and seller, accounting for the property’s condition, use, and potential.⁴ Listers weigh recent comparable sales, physical characteristics, and highest and best use.

Those values are compiled into the Grand List. Each property’s Grand List value equals one percent of its total taxable value.⁵ A home appraised at $350,000 shows up on the Grand List at $3,500. Tax rates are then applied to that Grand List value. It’s a longstanding Vermont convention, and it produces exactly the same result as applying the stated rate per $100 of full market value.

The Property Tax Credit

Vermont’s income-sensitive Property Tax Credit can substantially reduce what homeowners actually owe. It caps your property tax at a percentage of your household income, so you don’t pay more than the state considers your fair share relative to your earnings. The maximum credit is $8,000 a year: up to $5,600 against the education portion and up to $2,400 against the municipal portion.

The calculation uses three income tiers: household income up to $47,000, between $47,000 and $90,000, and $90,000 and above.⁶ Lower-income households get the most generous treatment, with housesite value protected up to $400,000 before the credit phases down. Above $90,000, the protected housesite value drops to $225,000. There’s a ceiling on eligibility entirely: household income for the 2025 claim year had to be below $115,400.⁷

You claim the credit on the Property Tax Credit section of Form HS-122, the same form as the Homestead Declaration. You’ll need your School Property Account Number from your tax bill and full income figures for everyone in the household: wages, retirement benefits, Social Security, investment income. Schedule HI-144 handles the household income detail.³ The deadline is April 15, same as the Homestead Declaration.

Renters aren’t left out. Vermont’s separate Renter Credit works on similar income-based principles for tenants whose rental is their primary residence, and the Department of Taxes provides an online calculator.⁸

Current Use for Farm and Forest Land

The Use Value Appraisal program, usually called Current Use, lets owners of large undeveloped parcels have their land taxed based on its agricultural or forestry value rather than its development potential. The savings can be significant, since a wooded hillside worth $500,000 for development might be valued at a fraction of that under forest use rates.

To enroll, land must meet one of these thresholds:

Agricultural land: at least 25 contiguous acres in active agricultural use, or a smaller parcel producing at least $2,000 annually from crop sales, or actively used farmland owned by or leased to a farmer.
Forest land: at least 25 contiguous acres managed under an approved 10-year forest management plan reviewed and monitored by a county forester.⁹

Applications use Form CU-301 with detailed maps showing enrolled acreage versus excluded house sites. There’s a $100 application fee for new enrollments, additions, and ownership transfers.¹⁰

The trade-off is a serious penalty if you later develop or withdraw the land. Vermont imposes a Land Use Change Tax equal to 10 percent of the land’s full fair market value at the time of development or withdrawal.¹¹ Develop only part of a larger enrolled parcel and the 10 percent applies to that part, valued as a separate parcel. On a piece with $200,000 in development value, that’s $20,000. Think hard before enrolling land you might eventually want to build on.

Exemptions

Some properties and owners pay no property tax, or a reduced amount. Vermont’s exemption statute covers government-owned property, religious institutions, cemeteries, charitable organizations, and properties used by groups such as the Red Cross and scouting organizations.¹² Household furniture, clothing, and farm livestock are also exempt as personal property.

Disabled Veterans

Vermont provides a specific exemption for disabled veterans and surviving spouses. State law mandates a minimum of $10,000 off the appraised value of the home, and towns may raise the exemption up to $40,000.¹³ Eligible individuals include veterans with a VA disability rating of 50 percent or higher, veterans receiving non-service-connected pension, and veterans collecting permanent military retirement pay for a medical retirement. Surviving spouses of veterans who previously received the exemption may also qualify.

To apply, submit proof of eligibility from the U.S. Department of Veterans Affairs to the Vermont Office of Veterans Affairs before May 1 each year. Veterans rated totally and permanently disabled only need to provide proof during their first year at a given address, but that first-year May 1 deadline still applies.¹³

Appealing Your Assessment

If you think your property has been overvalued, the first step is a grievance hearing with your town’s listers. If your property was recently reassessed, you’ll get a mailed notice with the grievance date. If it wasn’t, no notice goes out automatically, so you have to check with the town clerk or listers. Towns set their own grievance dates, but the statutory last possible date is June 19 in smaller towns and July 9 in towns of 5,000 or more. Most schedule earlier.

If the listers deny your grievance, you have 14 days from notice of that decision to file a written appeal with the town clerk. The appeal goes to the Board of Civil Authority, which must hold a hearing within 14 days after the appeal window closes. A committee of at least three Board members will inspect your property inside and out; refusing the inspection means your appeal is treated as withdrawn. The Board issues a written decision with its reasoning within 15 days of receiving the inspection committee’s report.¹⁴

Miss the initial grievance date and you generally wait a full year to challenge the valuation. Act when the Grand List is posted, not when the bill arrives.

Bills, Late Payments, and Tax Sales

Municipal treasurers mail tax bills roughly 30 days before the first payment due date.¹⁵ Most towns bill once a year but may offer annual, semi-annual, or quarterly installments; due dates vary town to town. Most take payment by mail or online.

Missing a deadline gets expensive quickly. The tax collector can charge a penalty of up to eight percent of the unpaid amount. Towns may vote a lower percentage or a grace period, but eight percent is the statutory default.¹⁶ Interest accrues on top: up to one percent per month for the first three months, then one and a half percent per month after. On a $5,000 bill, penalty and interest together can add well over $500 within months.

Tax Sales

Long-unpaid taxes can lead the town to sell your property at public auction. Before that happens, the tax collector must advertise the sale in a local newspaper for three consecutive weeks, with the final notice at least 10 days before the sale. You also get written notice by certified mail: at least 10 days before the sale if you live in the same town as the property, or at least 20 days before if you don’t. Mortgage and lien holders receive the same notice.¹⁷

Even after a sale, Vermont gives the former owner a one-year redemption window. You can reclaim the property during that year by paying the sale price plus one percent per month interest from the date of the sale.¹⁸ Fail to redeem, and the purchaser receives a deed and your ownership ends. The layered notice requirements and redemption period exist to give you multiple chances to catch up before losing the home.

1
Vermont General Assembly. Vermont Code 32-5402 – Education Property Tax Liability
2
Department of Taxes. Education Tax Rate Calculations – Frequently Asked Questions
3
Department of Taxes. Form HS-122 Instructions – 2026 Homestead Declaration and Property Tax Credit
4
Vermont General Assembly. Vermont Code 32-3481 – Definitions
5
Department of Taxes. Current Use and Your Property Tax Bill
6
Vermont General Assembly. Vermont Code 32-6066 – Property Tax Credit
7
Department of Taxes. Property Tax Credit
8
Department of Taxes. Calculator and Credit Amounts
9
Department of Taxes. Eligible Property
10
Department of Taxes. Current Use
11
Department of Taxes. Land Use Change Tax
12
Vermont General Assembly. Vermont Code 32-3802 – Property Tax Exemptions
13
Office of Veterans Affairs. Tax Exemptions for Veterans
14
Vermont General Assembly. Vermont Code 32 Chapter 131 – Appeals
15
Department of Taxes. Your Vermont Property Tax Bill
16
Vermont General Assembly. Vermont Code 32-1674 – Delinquent Tax Commission and Collection Costs
17
Vermont General Assembly. Vermont Code 32-5252 – Levy and Notice of Sale
18
Vermont General Assembly. Vermont Code 32-5260 – Redemption