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Property Taxes |
Property Taxes in Vermont are typically ranked as some of the highest in the country. Starting in the late 90's the school tax portion of property taxes has been determined by, and goes directly to the State. The State then redistributes the money based on the number of students in each town.
Property taxes are made up of two parts. The first is the municipal portion which goes to pay for roads, salaries, etc. in the town. The second portion is the school tax which is determined by the State and is based on the local school budget, number of students, the State determined level of taxes, and the Common Level of Appraisal* for the town. The school tax factors are plugged into a formula and the local school tax rate is determined.
The formula for determining each town's contribution has gone through a number of changes over the years. If a town wishes to spend more than the allotted amount per student, the residential tax base (homestead properties) gets taxed for the excess. Part of the increased taxes for residential properties gets sent to the State to distribute as a penalty for spending more than dictated.
Homestead and nonhomestead (nonresidential) tax rates differ in each town based on school spending. It varies which rate is higher and by how much.
The State has a Frequently Asked Question page on the School portion of the Property Tax.
Property is assessed at the municipal local level in Vermont. Real property is listed to the April 1 owner of record. Local assessing officials, called listers in Vermont, are charged with determining the appraisal value of property.
The legislative body of the municipality (selectboard or alderboard) sets a tax rate or rates to raise money for highways and other necessary municipal expenses. There are also provisions for the levying of taxes in villages and fire districts.
For the purposes of education funding, all real property is classified as either homestead or nonresidential. A statewide education tax is imposed on these two classes of property at different rates. The basis for this classification is the Homestead Decleration. Any property that is not a homestead is nonresidential property.
The homestead education tax rate in each municipality depends upon the local per pupil spending. Both the homestead and nonresidential education tax rates are adjusted by the local common level of appraisal. Each town will receive notice on or about June 30 of the education rates to be levied.
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* Common Level of Appraisal is the average difference between the sale price of properties in the town and their appraised values. If the average property sells for 85% of it's appraised value then the common level of appraisal would be 0.85. The purpose of the CLA is to have all property owners pay the school tax as if their property was appraised at market value. It is meant to adjust for towns which have not reappraised recently.
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