Property Taxes & Property Tax Credit

News: Mortgages and property taxes after a disaster

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 will have to pay the rate that people who do not live in property they own have to pay. You may also miss out on help from the state to pay your property taxes.

Most people file a homestead declaration and property tax credit form when they file their taxes. The deadline to file your tax return is typically April 15.
Starting with tax year 2022, the final date to file your homestead declaration and property tax credit form is March 15 of the following year. Example: When you file your 2022 taxes, the final deadline for this credit is March 15, 2024. This is different from most tax benefits. You will pay a late filing fee. 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 because he or she is unable to pay.

Applying for an abatement

Every Vermont city or town has a Board of Civil Authority or a Board of Abatement, which 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 him or her that you want to request 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 in order to prevent foreclosure. If you owe back property taxes or are also behind in your mortgage, read the Foreclosure page.

Tax sales

A Vermont city or town may take a person's home and sell it in order to pay back property taxes that are owed.

Before a town can sell your house at a tax sale, they must send you written notice of the time and place of the sale by registered mail at least 10 days before the sale. The notice must explain your right to request a tax abatement to stop the sale. Vermont towns can only sell as much of your property as is necessary to satisfy the tax debt.

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 redemption period.

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 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.