Vermont property tax rates come in two parts on the same bill: a state education tax and a local municipal tax, each expressed per $100 of assessed value. For FY2026, the homestead education rate starts at $1.00 per $100 and rises with local school spending, while the non-homestead education rate is a flat $1.703 per $100. Municipal rates are set town by town. The education portion of every bill is then divided by the town’s Common Level of Appraisal, which can push the effective rate up or down depending on how current local assessments are.
How the Bill Is Put Together
Your town’s assessor (called a “lister” in Vermont) assigns a value to your property. That value divided by 100 is your “grand list value.” Multiply the grand list value by the combined education and municipal rates, apply the CLA adjustment to the education portion, and that is your bill.
A quick illustration: a home assessed at $300,000 has a grand list value of $3,000. At a combined rate of $2.50 per $100, the base bill is $7,500 before any CLA adjustment or credit. Towns bill once a year, but payment schedules vary — some collect the full amount at once, others split it into semi-annual or quarterly installments.
Homestead Education Tax Rate
A homestead is the principal dwelling and surrounding land that a Vermont resident owns and occupies as a primary home. The statutory definition also reaches properties fully leased on April 1, provided the lease does not exceed 182 days in the calendar year.
The homestead education rate begins at a base of $1.00 per $100, paired with a “property yield” figure the legislature sets each year. For FY2026, the yield is $8,596. Your actual rate depends on your school district’s per-pupil spending relative to that yield: divide district per-pupil spending by the yield, then multiply by $1.00.
So a district that spends exactly $8,596 per pupil produces a homestead rate of $1.00 per $100. A district spending $12,894 per pupil produces a rate of $1.50 per $100. Higher spending approved by voters produces a proportionally higher rate. Towns tied to more than one school district get a blended rate based on the share of students attending each.
You Must File the Homestead Declaration
To get the homestead rate at all, you have to file a Homestead Declaration (Form HS-122) every year by April 15. If you own and live in your home but skip the form, your property is taxed at the non-homestead rate, which is almost always higher. The last date to file is October 15; after that, your property stays classified as non-homestead for the year.
Filing late brings a penalty on the education tax. In most towns, where the non-homestead rate is higher than the homestead rate, the penalty can reach 3% of the education tax. In the less common case where the non-homestead rate is lower, it can reach 8%. A fraudulent declaration carries a penalty equal to 100% of the education tax, plus interest and late fees.
Non-Homestead Education Tax Rate
Every property that isn’t someone’s declared homestead falls into the non-homestead category: commercial buildings, vacation homes, rental properties not occupied by the owner, and undeveloped land. These pay a single statewide education rate set by the legislature, regardless of local school spending.
For FY2026, that rate is $1.703 per $100 of assessed value. The underlying statutory rate is $1.59 per $100, divided by the “statewide adjustment” to produce the final figure. Because the rate doesn’t move with local budget votes, owners of commercial and vacation property can predict their education tax more easily than homestead owners. A warehouse in the Northeast Kingdom and a ski condo in southern Vermont pay the same $1.703 per $100 of assessed value.
Municipal Tax Rate
Municipal taxes fund what the town provides outside of schools: road maintenance, fire, police, libraries, local administration. Voters approve the municipal budget at town meeting or by Australian ballot, and the selectboard or city council sets a rate sufficient to cover the gap between the approved budget and other revenue like fees and state aid.
The rate depends on total approved spending divided across the town’s grand list. A town with a large commercial base can fund the same services at a lower rate than a town where nearly all property is residential. A major capital project such as a new fire station or road reconstruction will push the rate up temporarily.
Municipal rates are not adjusted by the Common Level of Appraisal. They apply directly to the locally assessed value of your property. Your municipal tax is a straight function of what your town votes to spend and what your property is worth on the local grand list.
The Common Level of Appraisal Adjustment
The Common Level of Appraisal keeps education taxes fair across towns that reappraise on different schedules. Each year the Department of Taxes compares what properties actually sold for in each town over the past three years against the assessed values those properties carried on the local grand list. The resulting ratio is the CLA, a percentage showing whether local assessments are above, below, or at market value.
The CLA matters because education tax rates get divided by it before they hit your bill. If your town’s CLA is 90%, the listed education rate is divided by 0.90, pushing the effective rate up. If the CLA is 110%, the rate is divided by 1.10, pulling it down. State law requires municipal tax bills to show this calculation so you can see the effect on your specific bill.
A worked example: if your town’s homestead education rate is $1.20 per $100 and the CLA is 80%, your effective education rate becomes $1.20 ÷ 0.80 = $1.50 per $100. The math compensates for local assessments sitting at only 80% of what properties would actually sell for. A neighboring town at 100% pays the straight $1.20. Two homes with the same market value end up paying roughly the same education tax whether one town last reappraised in 2015 and the other in 2023.
Income-Based Property Tax Credit
The listed rates aren’t the whole picture for many homestead owners. Vermont offers an income-based property tax credit worth up to $5,600 off the state education property tax and up to $2,400 off the municipal property tax. Household income must be $115,400 or below, and you must have filed the Homestead Declaration.
The size of the credit tracks income. Homeowners with household income at or below $47,000 get the most generous treatment, including the municipal credit component and a formula that caps education tax on the home at a percentage of income. Homeowners earning between $47,000 and $90,000 receive a scaled education credit but no municipal credit. Those earning between $90,000 and $115,400 receive a more limited education credit that phases out as income rises and applies a lower cap on the eligible value of the home.
You claim the credit by filing Form HS-122 with your Vermont income tax return. The state calculates the credit and applies it to your property tax bill through the town. That is another reason the Homestead Declaration matters: it’s the gateway to potentially thousands of dollars in annual savings, not just the lower rate.
Payment Timing and Late Charges
Towns mail tax bills once a year, generally 30 days before the first payment is due. Installment schedules vary — some towns collect annually, some semi-annually, many quarterly with payments spread from fall through spring. Your town clerk’s office or the town website has the specific due dates.
Missed payments get expensive quickly. Interest usually starts the day after a missed due date at 1% per month for the first three months and 1.5% per month after that. Once the final installment deadline passes, any unpaid balance takes an additional one-time 8% penalty. On a $5,000 bill, that penalty alone adds $400 before interest is counted. Towns have limited flexibility, so a call to the clerk before a deadline goes further than one afterward.