Vermont Homestead Exemption: Amount, Filing & Savings

· ✓ Last verified Oct 6, 2026 · March 7, 2026 · by AskDoss Research ·Property Tax · 8 min read

Vermont has no general homestead exemption that lowers assessed value. Its tax “homestead” is a yearly declaration under 32 V.S.A. § 5410: owners file Form HS-122 by the income-tax due date (April 15, 2026) so the home is billed at the homestead education rate. The same form carries an income-tested credit capped at $8,000.

The word also appears in a second, unrelated law. Title 27, chapter 3 shields a homestead from creditors’ attachment and execution up to $125,000 in value; in a more valuable property, only that much is set off and the rest can be sold. That rule is in the property title, not the tax title, and has its own section near the end of this page.

What declaring does to the school tax on your home

The Department of Taxes starts from this: “In Vermont, all property is subject to education property tax,” and there are two rates, homestead and nonhomestead. Under 32 V.S.A. § 5401(10), the nonhomestead class takes in all property except a short list, and for a house the item that matters is (C): “Homesteads declared in accordance with section 5410.” A home that was never declared is billed as nonhomestead property.

Which rate is lower depends on the town. Section 5410(g) covers both cases: a municipality “that has a lower homestead tax rate than the nonhomestead tax rate” and one “that has a lower nonhomestead tax rate than the homestead tax rate.”

Section 5401(7)(A) defines a homestead as “the principal dwelling and parcel of land surrounding the dwelling, owned and occupied by a resident individual as the individual’s domicile or owned and fully leased on April 1, provided the property is not leased for more than 182 days out of the calendar year.” Subdivisions (B) through (H) of the same section add rules for co-ops, land trusts, mobile homes, trusts, farm family dwellings, estates, business use and rentals. Read them there if your situation is unusual.

April 15, October 15, and the penalties in § 5410(g)–(i)

Section 5410(b) makes the filing yearly: “Annually, on or before the due date for filing the Vermont income tax return, without extension,” the owner declares the homestead “as of, or expected to be as of, April 1 of the year in which the declaration is made.” The statute sets the date, not the town. For 2026 the Department of Taxes lists April 15, 2026 as the due date and October 15, 2026 as the final date accepted. It adds that an income-tax extension does not move the declaration, and that owners with no return to file still have to declare.

A late or wrong filing is billed by the town. Under § 5410(g), the corrected bill “may, as determined by the governing body of the municipality, include a penalty of up to three percent of the education tax on the property.” The cap rises to eight percent in two cases: an incorrectly declared homestead in a town whose homestead rate is lower, or an undeclared homestead in a town whose nonhomestead rate is lower. If the Commissioner finds fraudulent intent, the penalty equals 100 percent of the education tax, plus interest and fees. After October 15, § 5410(i) applies. A late filing or correction brings no refund, any extra tax and interest is collected as a penalty, and the change “shall not be entered on the grand list.”

The town’s legislative body may abate for hardship (§ 5410(j)). Under § 5410(l), hardship means inability to pay as certified by the Commissioner, or a missed or wrong filing caused by any of these: full-time active military duty of the declarant outside the State; serious illness or disability of the declarant; serious illness, disability, or death of an immediate family member; or fire, flood, or other disaster. A domicile determination or a fraud penalty is appealed to the Commissioner of Taxes. Any other penalty under § 5410 is appealed to the listers “within 14 days after the date of mailing of notice of the penalty,” then to the board of civil authority and, after that, to the courts.

Section B of HS-122: the property tax credit

Under 32 V.S.A. § 6066(a) and (c), you must have owned the homestead on April 1 of the filing year. You must also have been domiciled in Vermont for the entire prior calendar year, and no one may have claimed you as a dependent. Section 6061(13) adds that the home must have been declared “on or before October 15.” The 2026 form limits Section B to household income up to $115,400, which is calendar-2025 income reported on Schedule HI-144.

Section 6067 caps the credit at $5,600 against education tax and $2,400 against municipal tax. The form states the total as “MAXIMUM CREDIT AMOUNT IS $8,000.” Only households whose income “does not exceed $47,000.00” get the municipal part. The credit covers only the housesite, which § 6061(11) limits to “in no event more than two acres per dwelling unit.” That limit applies to the credit, not to the declaration. Only one claimant per household is allowed. You are also barred if you received a homestead exemption or credit from another state for the same year.

The claim is due with the declaration (§ 6068(a)). If you file after October 15 but on or before March 15 of the next year, the credit is cut by $150 and paid to you directly. After that March 15, no claim is accepted (§ 6068(b)–(c)). The 2026 form’s own wording is narrower: claims “generally” cannot be accepted after Oct. 15, 2026. You may amend housesite figures, ownership percentage or household income for three years, but only on a claim filed by October 15 (§ 6074).

Trusts, LLCs, life estates and co-owners

Under § 6062(e), a trust-owned dwelling “is not the homestead of the beneficiary unless the claimant is the sole beneficiary of the trust,” and one of the following is also true:

  1. the claimant or the claimant’s spouse was the grantor, and the trust is revocable or became irrevocable solely because of the grantor’s death; or
  2. the claimant is the grantor’s parent, grandparent, child, grandchild or sibling, the claimant is mentally disabled or severely physically disabled, and the grantor’s modified adjusted gross income is counted in household income.

The department’s instructions say property owned by a C or S corporation, partnership or LLC “cannot be claimed as an individual’s homestead,” and “The only exception is for a homestead located on a farm.” A life tenant who lives in the home must file. Where there are several owners, “only one owner occupant should file.” When a house sells, § 6063(b) allocates its credit “to the seller at closing unless the parties otherwise agree.”

The disabled-veteran exemption in § 3802(11)

This exemption is limited to qualifying veterans and their families. It takes $10,000 of appraisal value off a residence owned in fee simple and occupied by a veteran, the veteran’s spouse, widow, widower or child, or any combination of them. “Any part used for business or rental” is excluded. At least one owner must receive disability compensation for at least 50 percent disability, death compensation, dependence and indemnity compensation, or a pension for disability paid through a military department or the VA. An unremarried widow or widower of a veteran who already qualified keeps the exemption “whether or not the individual is receiving government compensation or pension.”

You file with the Office of Veterans Affairs “before May 1 of each year”: a written application plus a statement from the Military Department or the VA showing the payment. “Only one exemption may be allowed on a property.” If the claim rests on permanent disability, you file only in the first year, and the exemption stays “until title to the property is transferred.” A town meeting vote can raise it “to up to $40,000.00 of appraisal value.”

Signed in 2026, not yet in force

Act 169, signed June 18, 2026, raises the $47,000 income line to $50,000 and lifts the caps to $2,600 (municipal) and $6,000 (education). Under its Sec. 16(e) those changes take effect July 1, 2027 and apply to fiscal year 2028 and after, so they do not apply to 2026 claims. Act 73 of 2025 would replace the education credit with a “homestead property tax exemption.” Act 170 of 2026 moved that change to July 1, 2029, and it takes effect then only if the conditions listed in the act are met.

27 V.S.A. chapter 3: the homestead creditors cannot levy on

Section 101 covers the homestead of a natural person: “a dwelling house, outbuildings, and the land used in connection therewith, not exceeding $125,000.00 in value, and owned and used or kept by the person as a homestead.” That homestead is “exempt from attachment and execution except as otherwise provided in this chapter.” The section was last amended by 2023, No. 6, effective July 1, 2023. The chapter’s limits are spread across separate sections:

  • § 102: on a levy, the owner may designate the exempt part; if the parties do not agree on appraisers, the officer appoints three who fix its bounds at $125,000 in value, and the officer sells the residue.
  • § 103: on a mortgaged homestead, “Only the portion of the mortgage as is in excess of the value of the real estate, aside from the homestead, shall rest on the homestead.”
  • § 105: at death the homestead passes to the surviving spouse free of the decedent’s debts, “unless legally charged on the homestead in the person’s lifetime.”
  • § 107: the homestead stays liable for “causes of action existing at the time of acquiring the homestead,” and that time is “the date of the filing of the deed.”
  • § 108: “Like other real estate, a homestead shall be liable for the payment of taxes assessed thereon.”
  • § 109: buying a new homestead leaves the old one open to your creditors. The new one keeps the old one’s protection only if it was bought with the old one’s sale proceeds “or with other means not derived from the property of such person.”
  • § 141(a): a married owner’s deed needs the spouse to join, except for a purchase-money mortgage given at purchase. A deed without the spouse is “inoperative so far only as relates to the homestead.”
  • §§ 182–183: when the property exceeds $125,000 in value and a severance would greatly depreciate or inconvenience, either party may ask the Superior Court for relief. The court may order a transfer with $125,000 paid to the owner, or a sale with the proceeds apportioned.

Questions Vermont owners ask

We closed in June 2026. Can we declare the house for 2026?

No, it goes on the 2027 declaration. The declaration speaks to April 1. For the prior cycle the department’s booklet said: “Buying after April 1, 2025 … you need to file a 2026 Homestead Declaration.”

I got an income-tax extension. Does the declaration wait until October?

No. Section 5410(b) ties the declaration to the due date “without extension.” If you file between April 16 and October 15, the home is still classified as a homestead, but the town may add a penalty of up to 3 percent of the education tax, or up to 8 percent where the nonhomestead rate is lower than the homestead rate.

Does last year’s declaration carry over?

No. The duty is annual, and each HS-122 names one parcel by the SPAN printed on its tax bill. If you move within Vermont, you declare the new house on the next filing. If you sell before April 1 after filing, withdraw with Form HS-122W.

Can a judgment creditor force a sale of my Vermont home?

Not of the part § 101 covers, up to $125,000 in value, but that protection has every limit listed in the section above. Section 101 measures value, not equity, so read § 103 on mortgages before relying on the figure.

More on owning in Vermont

Sources: 32 V.S.A. § 5410, 32 V.S.A. chapter 154, 27 V.S.A. chapter 3, Vermont Department of Taxes, Homestead Declaration.

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