All certificate requests must be submitted online through myVTax. To begin, select the Property Owners tab on the myVTax home screen.
A Commissioner’s Certificate reduces or exempts the transferor (seller) of property from withholding on certain real estate transaction taxes. Commissioner’s Certificates are available to the seller in a property transfer transaction to reduce or exempt the seller from withholding in the following situations:
Withholding on gains from a real estate sale
State income tax is due on a gain from a real estate sale in Vermont. If the seller is a nonresident of Vermont, the buyer is required to withhold 2.5% of the payment for the property being transferred and remit it to the Vermont Department of Taxes. If the seller obtains a Commissioner’s Certificate, withholding may be reduced or eliminated. The seller must meet certain requirements to be eligible for a certificate.
Withholding of land gains tax
The buyer is required to withhold 10% of the value of the property being transferred and remit it to the Vermont Department of Taxes. If the seller provides the buyer with a completed Form LGT-178, Vermont Land Gains Tax Return, and obtains a Commissioner’s Certificate, withholding may be reduced or eliminated. The seller must meet certain requirements to be eligible for a certificate.
Reasons to request a Commissioner’s Certificate
- Loss experienced on the sale.
- Withholding on gain would be lower than 2.5% of the sales price.
- Federal §121 exclusion will be claimed (primary residence exemption).
- Transaction is part of a §1031 exchange agreement.
- Some or all sellers are VT residents or domestic entities.
- Selling entity is tax-exempt.
- Another reason where the gain is not recognized federally.