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January 6 marked the opening of the second year of the biennium of Vermont’s legislative session. The opening was highlighted by Governor Phil Scott’s State of the State address to House and Senate members. The Governor's remarks focused entirely on education reform and property tax relief, with a commitment to carrying out the reforms outlined in Act 73, the 2025 education reform bill.
While VAR supports efforts to streamline Vermont’s education delivery system, we remain concerned that the tax provisions in this bill may have a significant impact on second homeowners. As part of Act 73, the Department of Taxes was required to issue a report on creating a new tax classification for second homes. This proposal would establish three classifications: Residential Homestead, Non-Residential (commercial, industrial, apartments), and Non-Homestead Residential (second homes).
The legislature also directed the department to calculate the cost of changes to income sensitivity in the bill and how any resulting reduction in property tax revenue could be offset by an increased tax rate on second homes. Early estimates suggest this policy could require doubling the tax rate on second homes.
VAR continues to focus on the work of the Land Use Review Board as it presents proposals to the legislature regarding where Act 250 appeals should be heard and conducts rulemaking on Tier 3 environmentally sensitive areas. VAR has been recognized by the Land Use Review Board and other advocacy groups for strong member participation in the Tier 3 public hearings. Our members delivered a clear and powerful message in support of private property owners who may find themselves within these newly defined environmentally sensitive areas.
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