Vermont Property Tax Rates 2026

What's the Difference between The Vermont Nonresidential vs. Homestead Tax?

In Vermont, all property is levied an education property tax to pay for Vermont's school systems.

Property is categorized as either nonresidential or homestead.

The property tax rate imposed upon nonresidential property is different from homestead property.

Property can be claimed as Homestead under these conditions:

The owner is a resident of Vermont.

The owner uses the property as their main residence as of April 1st of the taxation year.

Property is considered Nonresidential if any of these apply:

The property is not the owner's primary residence.

The property is a rental for more than 182 days of the year.

The property is used exclusively for a commercial business.

Understanding Vermont's Dual Property Tax System

Vermont employs a unique dual-rate property tax system designed to fund public education while maintaining fairness between residents and non-residents. This system distinguishes between Homestead and Nonhomestead (also called Nonresidential) properties, each subject to different tax rates set annually by the Vermont Legislature.

The Homestead property tax rate applies exclusively to properties that serve as the primary residence of a Vermont resident. To qualify for homestead status, the property owner must be domiciled in Vermont and occupy the property as their principal dwelling place as of April 1st of the tax year. Homeowners must file a Homestead Declaration with their town by the statutory deadline to claim this classification. The homestead rate is typically lower than the nonhomestead rate, reflecting Vermont's policy to provide tax relief to full-time residents who contribute to their local communities year-round.

The Nonhomestead property tax rate applies to all other taxable properties, including second homes, vacation properties, investment properties, commercial real estate, and properties owned by non-residents. This category also includes rental properties that are rented for more than 182 days per year, as well as any property not used as the owner's primary residence. The nonhomestead rate is generally higher than the homestead rate, though the difference varies by town based on local education spending and the Common Level of Appraisal.

The distinction between these two rates reflects Vermont's approach to education funding, which relies heavily on property taxes. Since education represents the largest component of most property tax bills in Vermont—often comprising 70-80% of the total tax burden—the state legislature sets these rates annually based on statewide education spending needs and the total property value in each category. This system ensures that property owners contribute proportionally to education costs while recognizing the different roles that homestead and nonhomestead properties play in Vermont communities.

The Common Level of Appraisal (CLA) Explained

The Common Level of Appraisal, or CLA, is a critical equalizing factor in Vermont's property tax system. The CLA represents the ratio between a town's assessed property values and the actual fair market values of those properties, expressed as a percentage. This ratio ensures tax equity across all Vermont municipalities, regardless of when individual towns last conducted property reappraisals.

Vermont law requires each town to maintain property assessments at fair market value. However, real estate values fluctuate over time, and not all towns reappraise their properties simultaneously. Some towns may conduct reappraisals every few years, while others may go a decade or more between comprehensive revaluations. Without the CLA adjustment, property owners in towns with outdated assessments would pay significantly less in taxes than those in recently reappraised towns, even if their properties had similar market values.

The Vermont Department of Taxes calculates each town's CLA annually by conducting a statistical analysis of recent property sales within the municipality. They compare the assessed values of sold properties (as listed in town records) to the actual sale prices, creating a ratio that reflects how current the town's assessments are relative to market values. For example, if properties in a town are selling for an average of 38% more than their assessed values, the town would have a CLA of approximately 0.72 (meaning assessments represent 72% of market value).

To calculate your actual property tax bill, the base education tax rate is divided by the CLA, then multiplied by your property's assessed value. This mathematical adjustment ensures that taxpayers in towns with lower CLAs (outdated assessments) pay proportionally more per dollar of assessed value, bringing their tax burden in line with taxpayers in recently reappraised towns. The formula effectively converts assessed values to current market values for taxation purposes, maintaining fairness across all municipalities.

Vermont's Statewide Adjustment: A New Equity Mechanism

Beginning with the 2025 grand list (taxes paid in 2026), Vermont implemented a Statewide Adjustment to address significant property value disparities that have emerged across the state. This adjustment represents one of the most substantial changes to Vermont's education property tax system in recent years and affects how tax bills are calculated in every municipality.

The Statewide Adjustment was enacted in response to dramatic and uneven increases in property values across Vermont. In some towns, particularly those in high-demand areas or near population centers, property values increased by 50% or more in just a few years. Other communities, especially rural towns and those with less development pressure, experienced much smaller increases or even declining values. These disparities created an inequitable situation where the education property tax burden was shifting away from high-growth towns and onto towns with slower property appreciation.

Under Vermont's education funding system, each town raises its share of statewide education costs based on its proportion of the total statewide property value (the grand list). When some towns experience rapid property value growth while others don't, the high-growth towns' share of education costs increases, which should result in lower tax rates for those communities. However, this also means that towns with stagnant or slowly growing property values bear a disproportionately higher tax burden, even though their residents' ability to pay hasn't necessarily increased.

The Statewide Adjustment works by applying a uniform factor to all property values across Vermont before calculating each town's share of education costs. This adjustment effectively "normalizes" property values to account for the statewide trend in property appreciation, preventing any single town or region from gaining an unfair tax advantage simply because local property values increased faster than the state average. The adjustment is recalculated annually based on changes in the statewide grand list.

For property owners, the Statewide Adjustment means that tax calculations now involve an additional step beyond the CLA. The Vermont Department of Taxes first applies the Statewide Adjustment factor to equalized property values (those already adjusted by the CLA), then uses these adjusted values to determine each town's education property tax rate. This ensures that education tax rates reflect each town's true share of education costs relative to the statewide average, rather than being skewed by localized real estate market conditions.

The practical impact varies by town. Municipalities that experienced property value growth significantly above the state average will generally see higher education tax rates than they would have without the adjustment, while towns with below-average growth will see relatively lower rates. This redistribution is designed to maintain equity and prevent education funding from becoming overly concentrated in areas where property values have stagnated, ensuring that all Vermont communities can adequately fund their schools regardless of local real estate market trends.

The Statewide Adjustment reflects Vermont's ongoing commitment to balancing local control of education with statewide equity in funding. While property taxes remain locally administered and tied to local property values through the CLA, the Statewide Adjustment ensures that no town or region bears an unfair share of education costs due to factors beyond local voters' control. Property owners should be aware that this adjustment, combined with the CLA and local education spending decisions, all influence their final tax bills.

Vermont Property Tax: Additional Important Considerations

Beyond the base education tax rates and CLA adjustments, several other factors influence Vermont property tax bills. Many towns levy additional municipal taxes to fund local services such as fire departments, libraries, road maintenance, and other community needs. These municipal rates are added to the education tax rates, though they are not subject to the homestead/nonhomestead distinction and apply uniformly to all property types within the town.

Vermont also offers various property tax adjustment programs to help residents manage their tax burden. The Property Tax Credit (formerly called the Property Tax Rebate) provides relief to homeowners whose property taxes exceed a certain percentage of their household income. This income-sensitivity feature makes Vermont's property tax system more progressive than in many other states, ensuring that lower-income homeowners are not disproportionately burdened by education property taxes, which do not consider ability to pay.

It's important to note that Vermont's education property tax rates can vary significantly from year to year based on statewide education spending, changes in the total grand list (the sum of all taxable property values), and legislative policy decisions. Property owners should monitor both state-level rate-setting and their town's CLA, as changes in either factor can substantially impact tax bills even if local spending remains constant. Towns with declining CLAs will see increasing effective tax rates unless they conduct reappraisals to bring assessments back to fair market value.