Here is some basic information about Property Transfer Tax and how it may apply to you.
Frequently Asked Questions
What is Property Transfer Tax?
Property Transfer Tax is a tax on the transfer of title to real property in Vermont. The tax applies to both property transfers by deed and to acquisitions of a controlling interest in an entity with title to a property.
When should you file a Property Transfer Tax return?
Transfer by Deed:
- A Property Transfer Tax Return must be filed with a town clerk whenever a deed(s) transferring title to real property is delivered to a town clerk for recording. A town clerk cannot record any deed unless it is accompanied by a completed Property Transfer Tax Return.
Transfer by Acquisition of Controlling Interest:
- A Property Transfer Tax Return must be filed directly with the Department of Taxes within 30 days after the transfer or acquisition. Presently, the Department is accepting only paper returns. An online return for acquisitions of controlling interests is not yet available. Taxpayers and preparers should contact the Business Unit directly at (802) 828-6632.
What is a “Controlling Interest”?
- 50 percent or more of the total combined voting power of all classes of stock of the corporation or
- 50 percent or more of the capital of the corporation or
- 50 percent or more of the profits of the corporation or
- 50 percent or more of the beneficial interest in voting stock of the corporation.
For Partnerships, LLCs, Associations, Trusts, and Other Entities:
- 50 percent or more of the capital of the entity or
- 50 percent or more of the profits of the entity or
- 50 percent or more of the beneficial interest in the entity.
Who is liable for the tax?
When a transfer is made by deed, the buyer or transferee is liable for the transfer tax.
When acquiring a controlling interest in an entity that holds title to property, the person making the acquisition is liable. All persons acting in concert to acquire a controlling interest are individually liable but should file only one return representing their combined acquisition of the controlling interest.
What types of loans are eligible for an exemption on the first $110,000.00 of Property Transfer Tax?
There are exemptions for the property transfer tax on the first $110,000 in value of the property transferred when the buyer obtains a mortgage loan:
- made by the U.S. Department of Agriculture and Rural Development or
- purchased by the Vermont Housing and Finance Agency.
USDA Rural Development Direct Home Loans are exempt for the first $110,000.00 in value because they are mortgages that USDA Rural Development has committed to make to the borrower.
Vermont Housing and Finance Agency purchased mortgages are exempt for the first $110,000.00 in value because they are mortgages that VHFA has committed to purchase from the originating lender.
USDA Rural Development Guaranteed Loans are not exempt. USDA does not commit to make or purchase these types of mortgages. Instead, USDA guarantees a loan that is provided by a financial institution. USDA will pay the lender if the borrower defaults, but the borrower must then repay the USDA. This arrangement is neither a commitment to make a mortgage or a commitment to purchase a mortgage.
How to submit a payment
If tax is due at the time of transfer by deed, please make checks payable to the Vermont Department of Taxes and complete Form PTT-173, Property Transfer Payment Voucher and send to:
Additional guidance regarding the payment of Property Transfer Tax involving a controlling interest will be available shortly. If you need immediate assistance, we recommend that you consult your tax preparer. Please contact the Department at (802) 828-6632 for questions regarding persons acting in concert to acquire a controlling interest in a person with title to property.
How do I file a return?
There are two ways to file your return when the transfer is by deed:
E-File using myVTax
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.
Please note when recording a deed: Complete Form PTT-172, Vermont Property Transfer Tax Return with identification numbers and one additional copy with the ID number redacted. Deliver the deed(s) and return to the town clerk. The clerk will record the deed(s) and they will send the copy(ies) with the identification numbers to the Department.
For Town Clerks
The following forms are acceptable to record:
|2017 Acceptable property tax forms|
|date of closing||form number|
|Prior to June 2015||Available online via myVTax. All previous paper forms accepted.|
|June 2015 - Dec. 7, 2016||Available online via myVTax or ePTTR* or PTT-172 (paper form rev. 6/15)|
|Dec. 8, 2016 - Current||Available online via myVTax or PTT-172 (paper form rev. 10/16)|
*Discontinued as of Dec. 7, 2016
|When to Apply the Property Transfer Tax and the Clean Water Surcharge|
|Type of Property||Value Taxed||0.5% Property Transfer Tax||1.25% Property Transfer Tax||0.2% Clean Water Surcharge|
|Not Principal Residence||All||✔||✔|
|Marginal Value > $100,000||✔||✔|
|Principal Residence Purchased w/ VHFA, VCTF, or USDA Assistance||$0-$110,000|
|$110,000 - $200,000||✔|
|Marginal Value > $200,000||✔||✔|
- 0.005 on the first $100,000
- 0.0145 on balance
Mortgage obtained through VT Housing Finance Agency/VT Housing & Conservation Trust Fund or the US Department of Agriculture and Rural Development
- First $110,000 is exempt
- 0.0125 on balance on purchase price between $ 110,001 and $ 200,000
- 0.0145 on balance of purchase price over $ 200,000.
Lands enrolled in State use value appraisal programs
- 0.005 Properties transferred before July 1, 2011
- 0.0125 Properties transferred on or after July 1, 2011 and before June 16, 2015
- 0.0145 for properties transferred after June 16, 2015