Property Taxes & Property Tax Credit

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Homestead Declaration and Property Tax Credit

Vermont homeowners need to file a homestead declaration, even if you are not required to file a tax return.

If you don’t file this form, you pay a different tax rate that people pay when they don’t live in the property they own. You may also miss out on help from the state to pay your property taxes.

Deadlines

The deadline to file your homestead declaration and property tax credit claim is typically April 15. Most people file a homestead declaration and property tax credit claim form when they file their income tax return.
If you need to, you can file as late as October 15, but you will pay late filing penalties.
If you file your homestead declaration by October 15, but don’t file your property tax credit claim by that date, you may still file your property tax credit claim by March 15 of the following year. You will pay a late filing penalty. That will take money out of the credit you may get.
You can’t get a property tax credit if you file after March 15 of the following year.

File online: Visit the Vermont Department of Taxes website to file your homestead declaration and property tax credit form online.

Get help: You can find free help to file your homestead declaration and property tax adjustment claim, if you meet the income limits.

Important: Did you get a letter about a property tax adjustment that lowers the amount you have to pay? If so, mail a copy of it right away to the escrow department of your mortgage company. Vermont law says the mortgage company has to recalculate your escrow payment within 30 days of getting the revised bill. This is important because your monthly escrow payment should go down.

If you cannot pay your property taxes

In Vermont, if you own your home and cannot pay your property taxes because your income is low, there may be something you can do. A city or town can decide that some or all of a person’s property taxes are forgiven because the homeowner is unable to pay them. This is called a “property tax abatement.”

Vermont law says that cities or towns can abate (forgive) all or part of a person’s property tax, interest and collection fees if they are unable to pay.

Applying for an abatement

Every Vermont city or town has a Board of Civil Authority or a Board of Abatement. This is the group of people in a town that decides if a homeowner can have a property tax abatement. To apply for an abatement, go to your town office or city hall. If your town does not have an office, ask the town clerk or a selectman. Tell them you want to ask for a tax abatement because you are unable to pay your property tax, and explain why.

Usually, a homeowner will be asked to write their request and provide financial information showing that they are unable to pay. There may be a meeting of the Board that the homeowner must attend to make their request in person.

Abatement qualifications

Vermont law says that any person may ask their Board of Abatement to abate some or all of their property taxes because they are unable to pay. However, it is up to the city or town where you live to decide whether to grant the request.

What happens if abatement is denied?

If you have a mortgage on your home and you do not pay your property taxes, the bank or mortgage company which holds the mortgage may pay the taxes on your property to protect their interest. Next, your lender may threaten to foreclose in order to recover the tax money from you.

If you are not going to be able to pay your taxes and your request for abatement is denied, it is a good idea to contact your lender as early as possible to try to work out an arrangement to prevent foreclosure. If you owe your lender for back property taxes or are also behind in your mortgage, read the Foreclosure page.

If you do not have a mortgage and your abatement request is denied, you can work with the town or city to come up with a reasonable repayment plan to pay back your past due taxes over time. Read more about reasonable repayment plans below.

Reasonable repayment plans

If you are behind on property taxes, you should contact your town tax collector or clerk to talk about a repayment plan. The law requires towns to offer you a reasonable repayment plan in writing before selling your property at a tax sale to recover past due taxes. If you agree to the repayment plan and make on-time payments under the plan, the town cannot start the tax sale process.

What is a reasonable repayment plan? By law, a reasonable repayment plan requires the town to consider:

your income and income schedule (how often you get paid)
the reason you fell behind on taxes
your tax payment history
how much you owe in past due taxes, and
how long you have been behind on taxes.

The town does not have to agree to a plan if it will take too long for you to pay the past due taxes. Also, if the town sends you a reasonable repayment plan and you reject it or do not respond, it does not have to work with you to come up with a new plan.

You should talk to a lawyer as soon as you can if you are behind on property taxes and need help understanding your right to a reasonable repayment plan.

Tax sales

A Vermont city or town may take a person’s home and sell it to pay back property taxes that are owed. Before the town can sell your property at a tax sale, you must be at least one year behind on taxes. The town also has to offer you a reasonable repayment plan in writing before it can put your home up for tax sale. If you agree to a repayment plan and make on-time payments under the plan, the town cannot sell your property.

The town can start the tax sale process if:

you are at least one year behind on taxes, and
you either rejected or did not respond to a written repayment plan offer, or
you did not make on-time payment under a repayment plan.

The town must send you written notice of the time and place of the sale by certified mail at least 30 days before the sale. The notice must explain your right to request a tax abatement to stop the sale.

Up to 24 hours before the sale, you can request that your town only sell a portion of your property to satisfy the tax debt. Your request must include a certification from the Act 250 district commission and the town zoning administration that the portion of property can be subdivided and meets the minimum lot size requirements. Otherwise, your entire property will be sold even if you only owe a small amount.

You should talk to a lawyer as soon as you can if you are behind on your property taxes and threatened with a tax sale.

Homeowners’ right to redeem

After the town sells your home at a tax sale, you can still get your home back. This is called the right to redeem.

You have 12 months from the time of the tax sale to pay the town the amount of money it sold your home for at the tax sale. If you pay the town the whole amount plus interest of 1% per month before the 12 months are up, you can keep your home. Also, you may continue to live in your home for the whole 12 months even if you don’t pay the taxes during that time.

You should talk to a lawyer as soon as you can if you are behind on your property taxes and threatened with a tax sale.

What happens if you cannot redeem your property?

If you cannot pay to redeem your property within 12 months of your tax sale, you will lose your home. The town will transfer it to the tax sale purchaser by recording a Tax Collector’s Deed in the land records.

If the tax sale purchaser paid more at the tax sale than you owed to the town, the town must pay you the difference. If the purchaser only paid the amount that you owed to the town, you may not get any money from the sale.

If you could not redeem and you lost your home at tax sale, you might be entitled to get back some of the value of your home. You should talk to a lawyer as soon as you can to find out your rights.