Vermont’s Tax Department is trying to get the word out about an important change to the homestead declaration. Starting this year, property owners now have to fill out the form each year.
A homestead declaration is a document that homeowners fill out when they purchase or change the status of a home they own in Vermont. According to the Vermont Department of Taxes, "property is considered ‘nonresidential’ until it is claimed as the owner’s ‘homestead.’ The declaration allows property to be taxed at the municipality’s residential rate, which is often lower than the rate vacation homes are taxed at.
In addition, the majority of property owners in Vermont are eligible for income sensitivity, allowing them to pay property taxes based on their annual income, rather than the value of their property. But a homestead declaration must be filled out before property owners can be considered for a property tax adjustment.
In 2012, the tax department asked the Vermont legislature to amend the filing guidelines to make the homestead declaration a yearly requirement. Tax Commissioner Mary Peterson says she thinks this will streamline the process for homeowners, who often got confused about which forms were required.
"The other two forms have always been annual filings and it was really tripping people up that this third form didn’t need to be filed every year and folks were confusing one or the other. So we thought it made sense and we asked the legislature to line these three forms up."
Starting this year, homeowners will fill out the homestead declaration annually. In addition, they’ll continue to file the household income form and the property tax adjustment claim, which tells the state the value of the property and the previous year’s tax bill.
Commissioner Peterson says confusion over the forms in the past has led to Vermont property owners paying more than they should have in property taxes.
But the confusion will only be eased if property owners know about the changes before the filing deadline of April 15th. Forms can be found on the Vermont Department of Taxes website.