Vermont Homestead Declaration and Property Tax Adjustment Claim
Homestead Declaration - Form HS-122
THE HOMESTEAD DECLARATION must be filed each year by Vermont residents for purposes of the state education tax rate. The Declaration identifies the property as the homestead of the Vermont resident. A Vermont homestead is taxed at the homestead education property tax rate, while a different education property tax rate applies to non-homestead property. Non-homestead property is property used for commercial purposes or property not used as the primary residence, such as a second home, camp, or summer cottage. A property may be classified as both homestead and non-homestead. This occurs when a part of the home is used for commercial purposes or as a rental. The property tax bill will show a homestead education property tax rate and a non-homestead education property tax rate. For more information on the Homestead Declaration, see 32 V.S.A. § 5410 and Reg. § 1.401(7).
When a portion of the property is the homestead and a portion is used for business purposes or rented, the following rules apply for reporting the use on Form HS-122, Homestead Declaration:
- Business Use: If no part of the homestead is used for business or the business use is 25% or less of the homestead, the entire property is taxed at the homestead education property tax rate. More than 25% business use of the homestead - enter the appropriate percentage. The business use is the same as reported on your Federal income tax return.
- Rental Use: The portion of your home that you rent to another person is not part of your home and is taxed at the nonresidential education rate. All rental use must be reported. There is no 25% allowance for rentals. The rental use percentage is the same as reported on your Federal income tax return.
Notice to Withdraw Vermont Homestead Declaration - Form HS-122W
Withdrawal of the Homestead Declaration should be filed when:
- Property is Sold - The seller must withdraw the declaration when transferring the title of the homestead to another owner on or before April 1, 2015. Note: The property tax adjustment remains with the property. The allocation of the seller's property tax adjustment is determined at the closing.
- Property was rented on April 1, 2015, but the claimant did not occupy it for at least 183 days in 2015.
- Property converted to a non-homestead - before April 1, 2015.
- Property is Owned by Estate - If the property is the descendant's homestead at the time of death (before April 1, 2015), the property now owned by an estate may retain homestead classification on the grand list until the following April 1 provided the property is not rented.
- Declaration Submitted in Error
Property Tax Adjustment Claim - Form HS-122W
Eligibility - A homeowner eligible for an adjustment is one who:
- owned and occupied property as his or her principal home on April 1, 2015;
- was a VT resident all of the calendar year 2014;
- was not claimed as a dependent by another taxpayer for tax year 2014; and
- has household income of $109,000 or less.
- On or before April 15, 2015 is a timely filed Form HS-122.
- Between April 16 and October 15, 2015 is a late filed Form HS-122. A late filing penalty is deducted.
- After October 15, 2015 the filing of Form HS-122 cannot be accepted.
Note: There is no extension of time to file Form HS-122
For additional information pertaining to either the Homestead Declaration (Form HS-122) or Property Tax Adjustment Claim (HS-122W), please click here.