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 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 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 certified 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.

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 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.