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Flood-Related Damage and Property Tax Abatement

Important: Property owners will need to contact their municipality to request an abatement.

Information for Municipalities

On February 7, 2024, Governor Phil Scott signed Act 82 (S.160), an act relating to State education property taxes and flood-related damage. This Act reimburses municipalities for qualifying flood-related education property tax abatements and associated borrowing expenses.

Criteria for Abatement and Reimbursement

A municipality may request reimbursement of State education property taxes it has abated on behalf of the taxpayer from the State only if certain criteria are met. First, property granted an abatement must be located in an area declared a federal disaster due to the July or August 2023 flooding. Second, the municipal board of abatement must make a finding that the primary structure on a property meets one or more of the following criteria: 

  • 50% or more loss in value

  • Loss of use for 60 days or more

  • Loss of utilities for 60 days or more

  • Condemnation

Third, a municipality may request reimbursement of State education property taxes it has abated only if both of the following conditions are met:

  • The municipality abated education property taxes on or before April 15, 2024, and

  • The municipality abated municipal property taxes in proportion to the amount of education property taxes abated.

Consideration of the Property Tax Credit

Municipalities may only be reimbursed for abatement of the final amount of property taxes due from the taxpayer. Property tax credits granted to eligible Vermont homeowners cannot be included in the municipality’s request for reimbursement.

Reconsideration of Abatement Decisions Made Between April 15, 2023, and February 7, 2024

Municipal abatement boards may reconsider abatement decisions made before the enactment of Act 82 on February 7, 2024, but not before April 15, 2023. However, abatements that are not flood-related are not eligible for reimbursement under Act 82.

Under Act 82, only decisions regarding abatements made between April 15, 2023, and February 7, 2024, may be reconsidered.

Reimbursement of Interest Expenses

A municipality may also request reimbursement of interest expenses on funds borrowed to make state education property tax payments due to disruption of tax collections resulting from flooding declared a federal disaster between July 1, 2023, and October 15, 2023. The reimbursement is limited to an amount equal to the municipality's reasonable interest expenses but not more than an 8% interest rate.

Application Instructions for Municipalities

Application #1: Request for Reimbursement of Flood Abatements for Property Taxes

Act 82 of 2024 allows the Department of Taxes to approve reimbursements to municipalities for qualifying state education property tax payments. A municipality may be reimbursed if it abated state education property taxes on property damaged by severe storms and flooding on July 7-21, 2023, and August 3-5, 2023. The abatements must be made no later than April 15, 2024.

Eligible municipalities may apply for reimbursement of abated state education property taxes using Application #1 and by submitting the accompanying parcel information spreadsheet. The application collects town-specific contact information. The Excel spreadsheet will be filled out and submitted to tax.pvr.@vermont.gov, and all parcels will be entered on a single sheet. Each parcel abated must individually meet the criteria to qualify for reimbursement.

  1. Application #1: Request for Reimbursement of Flood Abatements for Property Taxes

  2. Parcel Information: Request for Reimbursement of Flood Abatements for Property Taxes (xlsx)

Application # 2: Request for Reimbursement of Interest Incurred

This application is to be completed by an individual authorized on behalf of their municipality to request reimbursement for unanticipated interest incurred per Act 82 of 2024.

You will need the following information to complete the interest reimbursement request:

  • Municipality

  • Selectboard Approval confirmation

  • Name of Financial Institution

  • Total amount borrowed

  • Portion of funds borrowed to fulfill education property tax payments

  • Total education property tax liability

  • Date funds were borrowed

  • Rate of interest associated with the loan (%)

  • State of loan (satisfied or anticipated date of final payment)

  • An amortization schedule that isolates the amount of interest paid with each payment

  • Total dollar value request for interest to abate

Application Deadline and Date of Response

While the Department understands the highly compressed timeline for municipalities to complete abatements and apply for reimbursement, it strongly encourages application submissions as soon as possible. The due date for applications is Friday, April 26, 2024.

The Agency of Education will make payments through Cash Flow Statements to School Districts, indicating an overpayment. Municipalities will not receive checks.

Frequently Asked Questions

Will municipalities receive reimbursement for abated municipal property taxes?

No. Municipalities will only be reimbursed for education property taxes they abate and for reasonable interest paid on funds borrowed by the municipality to make the required state education property tax payment.

Can an individual property tax owner apply for this program?

No, this program is for municipalities to request reimbursement for abatements. Property owners who think they meet the above criteria must request abatement from their municipality directly.

What if our municipalities abate after April 15?

Municipalities can do so, however they are not eligible for reimbursement under Act 82.

When will I know if my request is approved?

We will process requests in the order they are received, the sooner municipalities submit them to the department, the sooner they can be processed and approval letters sent. The Vermont Department of Taxes must complete approval by May 1 in order to meet Agency of Education timelines and notifications will go out shortly thereafter to the contacts submitted in the application. If we have questions about the submittal, before we deny requests we will request further information from the contact submitted in the application.

How will a municipality be reimbursed for eligible abatements and borrowing expenses?

The Department of Taxes will notify the Agency of Education when a municipality's application for reimbursement has been approved. The Agency of Education will reimburse the municipality by reducing the amount owed for the next state education tax payment. Municipalities will not receive checks.

Additional Resources

State of Vermont Resources

Information for Towns

If you have any questions, please get in touch with us at (802) 828-5860 or tax.pvr@vermont.gov.