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.

Act 181 (H.687) of 2024 made certain changes to the Property Transfer Tax rates and exemptions, as well as the Clean Water Surcharge. Effective August 1, 2024, the Property Transfer Tax rates are as follows:

• Standard Tax Rate: Remains the same at 1.25%
• Clean Water Surcharge (CWS) Rate: Increases from 0.2% to 0.22% and increases exemption amounts
• Principal Residence Tax Rate: Special tax rate of 0.5% remains the same, but value subject to 0.5% rate (and exempt from the Clean Water Surcharge) increases from the first $100,000 of value paid to the first $200,000 of value paid.  The Standard Tax Rate of 1.25% plus the Clean Water Surcharge of 0.22% (total 1.47%) applies to the value paid above $200,000.
• Non-Principal Residence Tax Rate (for a non-long term rental residence fit for year-round habitation): Increases from 1.25% to 3.40% (3.62% including the Clean Water Surcharge).
• Exemption 99 (for a principal residence funded in part with a homeland grant through the VHCB or which the VHFA or the USDA Rural Development has committed to make or purchase): Increases exempt amount from the first $110,000 of value paid to the first $250,000 of value paid. The Standard Tax Rate of 1.25% plus the Clean Water Surcharge of 0.22% (total 1.47%) will apply to the value paid above $250,000.

New Exemptions from the Property Transfer Tax and Clean Water Surcharge:

• Abandoned Dwellings: blighted real estate owned and acquired by a municipality through condemnation or tax sale.  Buyer must certify at time of purchase that the dwelling will be rehabilitated and occupied as a principal residence and not as a short-term rental and prove within three years of purchase that rehabilitation of dwelling has been completed and dwelling is occupied as a principal residence.
• New ENERGY STAR Mobile Homes: new mobile homes as defined in 10 V.S.A. § 6201(1) that have an ENERGY STAR energy efficiency label and that are certified as a Zero Energy Ready Home by the U.S.  Department of Energy.

Form Changes

The 2024 legislative session changes will be reflected on the revised Property Transfer Tax Return (PTT-172 and associated instructions), which is scheduled to be available by August 1, 2024.

How to File

There are two ways to file your return when the transfer is by deed:

Online: Electronically file through myVTax.

Paper Return: 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 forms online or by contacting us at (802) 828-2515.

How to Make a Payment

Tax is due within 30 days of the closing date.

Online: You may pay electronically at myVTax.

By Mail: Please make checks payable to the Vermont Department of Taxes and complete Form PTT-173, Property Transfer Payment Voucher. Mail your payment and voucher to:

Vermont Department of Taxes
133 State Street
Montpelier, VT 05633-1401

How to File and Pay Controlling Interest

To report the transfer or acquisition of a direct or indirect controlling interest in any person with title to property please file Form PTT-182, Property Transfer Controlling using myVTax. Tax is due within 30 days of the transfer. You may pay electronically with myVTax, or by check. Please make checks payable to the Vermont Department of Taxes and complete Form PTT-173, Property Transfer Payment Voucher.

If you have questions or if you need assistance filing returns, please contact the Department at (802) 828-6851 or tax.rett@vermont.gov.

Property Transfer Tax Forms and Guidance

myVTax Instructions

Tax Forms and Instructions

Fact Sheets and Guidance

Property Transfer Tax Statistics

For Town Clerks

The following forms are acceptable to record:

Rate Schedule

When to Apply the Property Transfer Tax and the Clean Water Surcharge

Definitions

Principal Residence

"Principal residence" means a dwelling that, within one year from the date of transfer, will be occupied as the purchaser’s domicile, together with land that is beneath or directly contiguous to the dwelling and that is transferred with the dwelling. A domicile is a person’s principal dwelling. Principal residence includes any multi-family dwelling up to four units, if the purchaser will use at least one unit within the dwelling as their principal residence within one year from the date of transfer.

Principal residence” also means any dwelling that will be used by the purchaser as their principal residence within one year from the date of transfer, even though the purchaser also carries on or will carry on commercial activity in that dwelling. Commercial activity includes an office for the purchaser’s business or profession or a retail store

See 32 V.S.A. §§ 9601(11), 10002(b), and 10002a.

Landlord Certificates

Annually on or before January 31, landlords are required to be submit a Landlord Certificate for any property that will be used as a rental for periods of 30 more consecutive days, with or without a lease. For more information on Landlord Certificates, see https://tax.vermont.gov/property/landlord-certificates.

Exceptions

Principal Residence

• 0.005 on the first $200,000

• 0.0147 on the balance

Mortgage obtained through VT Housing Finance Agency/VT Housing & Conservation Trust Fund or the US Department of Agriculture and Rural Development 

• 0.0147 (includes both 1.25% Property Transfer Tax and 0.22% Clean Water Surcharge) on the balance of purchase price over $250,000

Non-principal residence fit for year-round habitation and not a long-term rental

• 0.0362 on the purchase price (includes both a 0.034 Property Transfer Tax and 0.22% Clean Water Surcharge)
• A non-principal residence fit for year-round habitation is not subject to the 0.0362% tax rate if the purchaser will be required to submit a Landlord Certificate, which is required for properties rented long-term for 30 days or more

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 on or after June 16, 2015, and before August 1, 2024

• 0.0147 for properties transferred on or after August 1, 2024

Types of Loans Eligible for an Exemption

There are exemptions for the property transfer tax on the first $250,000 in value of the property transferred when the buyer obtains a mortgage loan:

1. made by the U.S. Department of Agriculture and Rural Development or

2. purchased by the Vermont Housing and Finance Agency.

• USDA Rural Development Direct Home Loans are exempt for the first $250,000.00 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.

Frequently Asked Questions

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. To report the transfer or acquisition of a direct or indirect controlling interest in any person with title to property please file Form PTT-182, Property Transfer Controlling Interest using myVTax. If you have questions, please contact the Department at (802) 828-6851 or tax.rett@vermont.gov.

What is a “Controlling Interest”?

For Corporations:

1. 50 percent or more of the total combined voting power of all classes of stock of the corporation or

2. 50 percent or more of the capital of the corporation or

3. 50 percent or more of the profits of the corporation or

4. 50 percent or more of the beneficial interest in voting stock of the corporation.

For Partnerships, LLCs, Associations, Trusts, and Other Entities:

1. 50 percent or more of the capital of the entity or

2. 50 percent or more of the profits of the entity or

3. 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.