Attn Second Home Owners in Vermont

[thetrailboss]

Fair warning.......

To tax a second home, first you have to define it

Simply taxing second homes at a higher rate is not so simple, in part because Vermont currently has no system for categorizing vacation homes. But lawmakers are trying to change that — with the House's sweeping education reform bill.

www.vermontpublic.org

 

[cdskier]

Wanting to tax non-residents (that use far less services) more than residents is such a bizarre concept. No surprise that the poll cited in the article showed large support for that though. If you can get others that have no voice/vote to pay for your own stuff...why not. Good thing Scott has veto power and there doesn't seem to be veto-proof support for that.

FWIW...my taxes in VT have sky-rocketed the past couple years. On a percentage basis the increase is pretty substantial. It was fairly level for a long time with only minimal changes. I believe it was close to a 70% increase in total in just the past 2 years.

 

[thetrailboss]

Wanting to tax non-residents (that use far less services) more than residents is such a bizarre concept. No surprise that the poll cited in the article showed large support for that though. If you can get others that have no voice/vote to pay for your own stuff...why not. Good thing Scott has veto power and there doesn't seem to be veto-proof support for that.

FWIW...my taxes in VT have sky-rocketed the past couple years. On a percentage basis the increase is pretty substantial. It was fairly level for a long time with only minimal changes. I believe it was close to a 70% increase in total in just the past 2 years.

It seems that the idea of increasing taxes on second homeowners is almost out of spite.

 

[skiur]

Vermont locals seem to really hate tourism which is strange being that their economy would collapse without it.

 

[thetrailboss]

Vermont locals seem to really hate tourism which is strange being that their economy would collapse without it.

It is displaced anger due to the state losing "good" jobs that pay well. Jobs in tourism overall do not pay well. Honestly, it is the same anger that most folks in MAGA have--a loss of decent paying blue collar jobs largely in manufacturing. Vermont also has terrible demographics that do not help the economic picture.

 

[Edd]

I’d wonder if this tax results somehow in reduced taxes for locals. So many houses being 2nd homes does drive up the cost of living for the locals because the housing supply gets constrained, right? Honest question.

 

[VTSkiBike]

I’d wonder if this tax results somehow in reduced taxes for locals. So many houses being 2nd homes does drive up the cost of living for the locals because the housing supply gets constrained, right? Honest question.

Yes, it certainly does. I'm a public school teacher in Vermont and many new hires end up going elsewhere because there is simply no place to live locally that is affordable. Every summer, our district sends out emails to staff asking if anyone has an extra room or empty apartment for new hires. Housing inventory has gotten slightly better since COVID but its still scarce and very expensive (especially long term rentals because they're mostly AirBnBs now). The recent flooding also threw some salt in the wound, as many homes are no longer liveable or are tough to sell because they will get flooded sooner or later.

Additionally, the population here is aging and many retirees can't handle the increased property taxes because they're on a fixed income. People are frustrated and tend to blame second home owners who are paying over asking price for homes and driving up the cost of living. There's obviously other factors but second home owners seem to be an easy scapegoat for some locals. That said, we certainly need tourists and "transplants" to fill jobs and keep the economy going.

 

[thetrailboss]

So many houses being 2nd homes does drive up the cost of living for the locals because the housing supply gets constrained, right? Honest question.

This is another bone of contention for locals.

 

[snoseek]

I would love to move over to vt and have thought about it many times but yeah the housing and taxes scare too much. I'm a hospitality guy so finding decent work doesn't concern me at all but a decent place to live seems out of reach.

So aside from taxing the shit out of second home owners what's the potential solution? I am definitely on board with str paying some sort of tax but that money probably evaporates into the budget.

 

[AdironRider]

Blaming second home owners while the State and virtually every local planning board steadfastly refuse to allow basically any new housing to be built is pretty rich.

 

[x10003q]

Fair warning.......

To tax a second home, first you have to define it

Simply taxing second homes at a higher rate is not so simple, in part because Vermont currently has no system for categorizing vacation homes. But lawmakers are trying to change that — with the House's sweeping education reform bill.

www.vermontpublic.org

Vermont is already doing a version of this in the current VT property tax system.

In 1997, Vermont passed Act 260 to "equalize" education funding across the state. VT took over property taxes and distribution of funds from local towns. At the time, my buddy had a good sized townhouse slope side at Stratton. He was paying about $4500/year for the local property taxes/school funding. The property tax was $4500 because it was based on the small number of school kids in the district. The law was enacted and after about 5 years his property taxes were $25k with no increase in the number of school kids in the district.

The results of this change and the updated Act 68 (according to studies) seem to have equalized spending and achievement by students, but there are also studies that show the financial burden has massively shifted to districts with expensive property (ski area towns). Vermont is already hammering a vast swath of second homeowners because of the high assessed value of properties in and around ski areas. If they pass this it will only take even more money from second homeowners.

Act 60 (Vermont law) - Wikipedia

en.wikipedia.org

 

[thetrailboss]

Vermont is already doing a version of this in the current VT property tax system.

In 1997, Vermont passed Act 260 to "equalize" education funding across the state. VT took over property taxes and distribution of funds from local towns. At the time, my buddy had a good sized townhouse slope side at Stratton. He was paying about $4500/year for the local property taxes/school funding. The property tax was $4500 because it was based on the small number of school kids in the district. The law was enacted and after about 5 years his property taxes were $25k with no increase in the number of school kids in the district.

The results of this change and the updated Act 68 (according to studies) seem to have equalized spending and achievement by students, but there are also studies that show the financial burden has massively shifted to districts with expensive property (ski area towns). Vermont is already hammering a vast swath of second homeowners because of the high assessed value of properties in and around ski areas. If they pass this it will only take even more money from second homeowners.

Act 60 (Vermont law) - Wikipedia

en.wikipedia.org

FWIW Act 60 was put into place due to the Vermont Supreme Court decision in Brigham. The Vermont Constitution provides for equal educational opportunities. As someone that grew up in a poor part of Vermont, the difference before Act 60 and after is pretty stark. A lot of the so-called "gold towns" had amazing resources while the rest could barely afford supplies. It is what it is.

 

[x10003q]

FWIW Act 60 was put into place due to the Vermont Supreme Court decision in Brigham. The Vermont Constitution provides for equal educational opportunities. As someone that grew up in a poor part of Vermont, the difference before Act 60 and after is pretty stark. A lot of the so-called "gold towns" had amazing resources while the rest could barely afford supplies. It is what it is.

I agree, just pointing out that Vermont is already charging 2nd homeowners more on property tax based on the value of the property with higher values where many 2nd homeowners buy.

 

[parahelia]

I agree, just pointing out that Vermont is already charging 2nd homeowners more on property tax based on the value of the property with higher values where many 2nd homeowners buy.

And that rate is already high compared to neighboring states! When we were looking to buy our condo, we priced out some at Sugarbush as well as Sunday River. The taxes were more than 3x as much for the slopeside condo in VT versus ME. We were leaning Maine anyways due to nearby family, but the cost difference made it an easier call.

 

[BodeMiller1]

Wanting to tax non-residents (that use far less services) more than residents is such a bizarre concept. No surprise that the poll cited in the article showed large support for that though. If you can get others that have no voice/vote to pay for your own stuff...why not. Good thing Scott has veto power and there doesn't seem to be veto-proof support for that.

FWIW...my taxes in VT have sky-rocketed the past couple years. On a percentage basis the increase is pretty substantial. It was fairly level for a long time with only minimal changes. I believe it was close to a 70% increase in total in just the past 2 years.

Most around Montpelier are furious about the tax rate increase (and what they get for their money).

Floods, COVID, bearmanpig and others....

 

[BodeMiller1]

Maine is Boston North. Vermont is New York (Where KISS is from )

New York has money to throw around than Boston.

Therefore: Ski Condo or Ski House would most likely be more expensive in Vermont.

 

[thetrailboss]

I agree, just pointing out that Vermont is already charging 2nd homeowners more on property tax based on the value of the property with higher values where many 2nd homeowners buy.

Oh absolutely. As I mentioned before, it is almost out of spite.

 

[BenedictGomez]

Vermont also has terrible demographics that do not help the economic picture.

Well, it doesn't help when every college educated Vermonter instantly flees the state before their diploma's even in a frame.

 

[BenedictGomez]

Wanting to tax non-residents (that use far less services) more than residents is such a bizarre concept. No surprise that the poll cited in the article showed large support for that though. If you can get others that have no voice/vote to pay for your own stuff...why not.

I dont know the current situation in Vermont, but in many places as of recent the desire to bigly increase taxes on second homes, vacation homes, AirBnbs, etc.... is to either unlock them for the existing home market or to convert them into Long-Term Rentals rather than Short-Term Rentals, due to the skyrocketing (post COVID-19) housing costs. More Supply = Lower Prices.

This phenomena especially exists in tourist/outdoor/recreation spots, so I wouldn't be surprised if this is at least in part some of the motivation.

 

[thetrailboss]

Well, it doesn't help when every college educated Vermonter instantly flees the state before their diploma's even in a frame.

Yep. Give me some credit--I held on for three years before leaving.