We get this question quite a bit. Especially from Vermont 1st Time Homebuyers, or buyers moving to Vermont from another State. Today, we'll take some time to dive into what you should expect to pay at closing when buying a home in Vermont. In Vermont, the buyer of real estate pays the "Vermont Property Transfer Tax." (This differs from State to State, so there is the possibility you may sell a home in one state, pay your tax, and then pay a tax when you buy in Vermont!) If the buyer is going to have the residence as their primary residence, the tax is calculated as follows:
- .5% of the first $100,000, then 1.25% for that portion of the sales price over $100,000.
The law allows for a few exemptions from this tax, and they should certainly be explored with your attorney:
- a transfer directly to a creditor to secure a debt.
- tansfers to a corporation
- transfer without payment to a spouse, child, or grandparent
Usually the property transfer tax form is filled out by the SELLERS attorney, and signed by each party at closing. For Sellers, if you are selling your primary residence, and it has been your primary residence for at least 2 years, you will avoid a capital gains tax. As for property taxes, see the following link for information from Town to Town: http://www.vermontrealestatetoday.com/newsletter/2009effectivetaxrates.pdf
You will notice that property tax rates vary greatly from town to town. In conducting your Vermont home search, be sure you have a firm grasp on how taxes may differ from each town you may be looking. You may be surprised at the differences from one town to the next! For more information, or to ask about your options in buying Vermont Real Estate, contact Brad today at email@example.com