Land Gains Withholding Tax

Notice: Effective with returns filed after Jan. 1, 2020 H.541 of the 2019 Legislative Session changed the definition of “land” subject to the Land Gains Tax. Under the revised definition, Vermont land is only subject to the tax when it has been purchased and subdivided by the transferor within six years prior to the sale or exchange of the land. “Subdivision”  means a tract or tracts of land that have been partitioned or divided for the purpose of sale or transfer by the person who owns or controls the land. Subdivision occurs when the first lot is transferred from the transferor to the transferee or a plat, plan, or deed is filed in the town records, whichever occurs first. The exemption for transfer of land in a Vermont neighborhood or neighborhood development area has been expanded to include a downtown development district, a village center, a growth center, or a new town center development district. Read more >>

Overview

A buyer of Vermont land held for less than six years is required to withhold 10% of the consideration attributable to the land.  At the time of any payment the withholding must be submitted to the Vermont Department of Taxes. The appropriate voucher and/or the Vermont Land Gains Withholding Tax Return form LGT-177 must accompany the withholding payment.  If the buyer does not remit withholding the Department will seek relief directly against the buyer for any tax due up to the amount of withholding.

Request a Commissioner's Certificate

If a Commissioner's Certificate is presented at the time of closing which certifies that tax was paid in advance, that no tax is due, or a conditional amount is required to be withheld the buyer can rely on this certification and will not be held liable if in the future any tax is due with respect to that particular transaction.

Sellers: Request a Commissioner's Certificate

A buyer may also simultaneously file form LGT-177 with the seller paying the exact amount of tax due shown on the sellers Land Gains Tax Return LGT-178, and no withholding is necessary. In this case if it is later determined any tax is due the buyer will be liable to pay that amount up to 10% of the consideration originally exchanged.

Certain exemptions may be claimed by the buyer on form LGT-177. When an exemption is claimed the buyer certifies that if they do not comply with that exemption, they agree to take personal liability for the amount of tax that would have been due from the seller.  If an exemption is claimed and there are acres transferred beyond the amount allowed by that exemption withholding must be remitted for 10% of the value attributable to the nonexempt portion of the land.

How to File

Online
E-File using myVTax

Paper Forms
Tax preparers who file more than five returns or certificate requests per calendar year are required to use myVTax for filing. If you file fewer than five returns, you can order a specific form online or by contacting us at (802) 828-2515.

Forms and Publications

No. Instructions Title
LGT-174   Land Gains Installment Payment Voucher
LGT-177

Instructions

Vermont Land Gains Withholding Tax Return To Be Completed By Buyer (Transferee)
LGT-178 Instructions Vermont Land Gains Tax Return To Be Completed By Seller (Transferor)
LGT-179 Instructions Vermont Land Gains Schedules
LGT-181 Instructions

Land Gains Basis Calculation Foreclosure Property

PUBLICATIONS
No.   Title
FS-1155   The Land Gains Certificate: Three Options for Filing Land Gains Tax
GB-1131   myVTax Guide: How to File the Land Gains Tax Return

Contact

Commissioner Craig Bolio
(802) 828-2505 | Department Directory

Taxpayer Services
(802) 828-2865
Mon, Tue, Thu, Fri, 7:45 am-4:30 pm 

Taxpayer Assistance Window
1st Floor Lobby | 133 State Street
Montpelier, VT 05602
Temporarily Closed to the Public

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