Last week, the Town of Woodstock announced that beginning in April, a 3% penalty will be applied to full-time residents’ total education tax if they fail to declare homestead status.
In Vermont, all property is subject to education property tax to pay for the state’s schools. For this purpose, a property is categorized as either homestead or nonhomestead. A homestead is the principal dwelling and parcel of land surrounding the dwelling, owned and occupied by the resident as the person’s domicile, according to Title 32: Taxation and Finance of the Vermont Statutes.
Those who meet this definition of a Vermont homestead must file a homestead declaration annually by the April filing deadline. All properties in Vermont are considered nonhomestead unless they are specifically declared as a homestead, according to Vermont state statute.
The education property tax rate levied on nonhomestead property differs from the rate levied on homestead property, and it is the taxpayer’s responsibility to file their status correctly, state tax official Lisa Pinkus told the Standard.
Finance director for the town of Woodstock, Robert Densmore, explained the difference in tax rates for homestead and nonhomestead. He told the Standard, “The tax rate per $100 for a homestead is 2.6670 and 2.1694 for a nonhomestead. For $100,000, homestead would be $2,667, and nonhomestead would be $2,169.40. So roughly the difference between the two filings would be $497.60 per $100,000 of value.”
Recently, tax bills were made public, and a resident pointed out on the town listserv that four out of the ten elected governing officials in Woodstock had been issued tax bills that did not properly reflect their homestead status.
During a joint meeting of the village trustees and town selectboard on Monday, Feb. 23, selectboard member Keri Cole and chair of the trustees Seton McIlroy, spoke to the issue. Cole said, “I was late filing my homestead declaration due to an accounting oversight. As soon as it was brought to my attention, I did file before the deadline in October.”
McIlroy added, “I, too, was initially listed as nonhomestead due to an out-of-state accountant. As soon as I received my tax bill, I immediately went and had it remedied, and that is all on file. It happened as soon as the letter came to my house, and I called and got it remedied. So, I am listed as homestead and a registered voter.”
Cole went on to point out that the selectboard voted unanimously in November in support of imposing a 3% penalty fee on residents who file incorrectly or fail to file their homestead declarations. The state allows up to an 8% penalty fee, according to finance director Densmore.
Densmore spoke with the Standard this week about Homestead declarations and the implementation of this new 3% penalty.
“This is my third year working with tax bills,” Densmore began, “and the penalty has always been waived. So, when we were looking into this process each year, the people who run our accounting software — which also does the property tax bills — have brought up the penalty to us, as a way of nudging the town toward ensuring that residents file their homestead declarations on time.”
For more on this, please see our March 12 edition of the Vermont Standard.
