Vermont property transfer tax: rates, who pays, exemptions

What are the rates?

The Vermont Department of Taxes lists the rates below. The general rate is 1.25%, and the surcharge is 0.22%, both set by statute.

The tax is 1.25% of the value, or $1.00, whichever is greater, except where a lower or higher rate applies (§ 9602). The Department notes that USDA guaranteed loans do not qualify for the $250,000 relief, because USDA does not commit to make or buy them. Mortgages that the Vermont Housing Finance Agency has committed to purchase do.

What counts as a principal residence?

The Department defines it as a dwelling that, within one year of the transfer, will be the buyer’s domicile, together with the land beneath and directly contiguous to it. A multi-family building of up to four units qualifies if the buyer lives in one unit. A home office or shop in the dwelling does not disqualify it.

What changed for second homes and rentals in 2026?

Under § 9602(4), a residential property fit for year-round habitation pays 3.4% if it will not be the buyer’s principal residence and the buyer will not file a landlord certificate for it. “Fit” means the home has features such as insulation, heating, plumbing and running water. Short-term rentals pay the higher rate.

Act 164 of 2026, signed on June 18, 2026 and effective on passage, added subdivision (5). If a buyer files a landlord certificate but there is no bona fide landlord-tenant relationship, the Commissioner assesses the 3.4% rate. The Commissioner may look at whether the buyer and tenant are related, whether the rent is fair market rent, and whether an entity buyer has a business purpose other than avoiding the tax. The online statute copy I read had not yet picked up this change, so this article relies on the enacted Act and the Department’s page.

Who pays, and when?

By statute the tax is the buyer’s liability “unless fixed otherwise by agreement of the parties” (§ 9604). It is due within 30 days after the transfer (§ 9605). A property transfer return must be delivered to the town or city clerk when the deed is recorded, and the clerk cannot record the deed without it (§§ 9606, 9608). The return is filed through myVTax or on paper; tax preparers who expect more than five returns a year must use myVTax.

What does it cost on a $400,000 home?

These figures apply the statutory rates to a hypothetical sale price.

The $400,000 primary-residence figure is built this way: 0.5% of $200,000 is $1,000; 1.25% of the remaining $200,000 is $2,500; the 0.22% surcharge on that $200,000 is $440. The total is $3,940.

Which transfers are exempt?

Section 9603 lists 28 exemptions. The ones most relevant to home owners include:

• Transfers between spouses, parent and child (or the child’s spouse), or grandparent and grandchild (or the grandchild’s spouse), without actual consideration.
• Transfers between divorcing spouses under a court judgment.
• Transfers to a lender to secure a debt, and releases back to the borrower.
• Transfers in a foreclosure or deed in lieu between borrower and lender.
• Transfers that only correct an earlier recorded transfer.
• Transfers of an abandoned municipal dwelling that will be rehabilitated and occupied within three years.

Exempt transfers still need a return that states the basis for the exemption (§ 9606(b)).

What else is due at the clerk’s office, and what is separate?

The clerk charges $15 per page to record a document and $15 to file the return (32 V.S.A. § 1671). Vermont records land documents by town or city and has no county recording system, according to the Burlington Clerk. For the full list of closing items, see closing costs in Vermont, and for Burlington specifically, see the Burlington guide.

Two other state charges can arise at a sale but are not transfer taxes. A buyer from a nonresident seller must withhold 2.5% of the price for income tax. Land bought and subdivided by the seller less than six years earlier can owe the land gains tax, with a 10% buyer withholding rule.