Vermont recently established a new credit to help homeowners pay their property taxes. Eligible homeowners can get up to $8,000 in Vermont Property Tax Credit. Homeowners whose property qualifies as a homestead and meets other eligibility requirements could qualify for the credit on the property taxes paid.
Vermont Property Tax Credit: who will get it?
Vermont’s Property Tax Credit amount depends on several factors, but the maximum credit available is $8,000, including $5,600 for the education property tax portion and $2,400 for the municipal property tax portion.
To claim the Vermont Property Tax Credit, eligible homeowners need to apply by April 15, 2024, while a late fee of $15 is charged for those applying after that. The authorities won’t accept any credit claims after Oct. 15, 2024.
Not all property owners qualify for the Vermont Property Tax Credit, rather a homeowner needs to meet the following requirements:
- Must be domiciled in the state for the full prior calendar year.
- Must not be claimed as a dependent by someone else.
- The property must qualify as a homestead, and the homeowner must have filed a Homestead Declaration for the current year’s grand list.
- Owner must have the property as their homestead as of April 1.
Apart from these, homeowners need to meet the income requirements as well to qualify for the credit. For example, the household income must not be more than $128,000 for the 2023 calendar year.
It must be noted that owners of rental properties don’t qualify for the credit unless the property is leased for less than 182 days.
How to apply
Vermont’s Property Tax Credit is a much-needed relief for homeowners amid an anticipated increase in the cost of homes in 2024. The Vermont Department of Taxes estimates property tax rates for 2024 to rise by about 18%.
It implies that for every $100 in property value, the average homestead property tax rate could surge from $1.54 to $1.80 in fiscal year 2025. So, the property tax on a house valued at $250,000 could rise by about $650.
Providing a tax credit is a better use of excess government funds, rather than directly sending out cash. Vermont recently reported a record $90 million surplus in its education fund.
To claim the Vermont Property Tax Credit, property owners need to submit two forms – Form HS-122 (Homestead Declaration and Property Tax Credit Claim) and Schedule HI-144 (Household Income). Homeowners can submit their claim electronically when filing their Vermont Income Tax return.
Separately, those who claim the Property Tax Credit with their Homestead Declaration are allowed to amend their household income within three years of the April filing deadline. The amended or changed household income, however, must be the same as reported on Schedule HI-144
Visit the Vermont government website to get more information on the property tax credit.
