What Counts as a Primary Residence in Vermont?

This article is for informational purposes only and should not be taken as legal or tax advice. Please consult a licensed professional for guidance specific to your situation.

When it comes to owning property in Vermont, the difference between a primary residence and a non-residential property can have a big impact—especially when it comes to taxes. Understanding what the state considers a “primary residence” is essential for buyers, sellers, and second-home owners alike.

What Is a Primary Residence?

In Vermont, a primary residence—also called a homestead—is your main home. It’s the place where you live most of the year, keep your belongings, receive mail, and register to vote. It can be a house, condo, or mobile home, as long as it’s your legal domicile.

The distinction matters because Vermont offers property tax benefits to homeowners who declare their home as a homestead. If you don’t, you’ll pay the non-homestead education tax rate, which is higher.

Who Qualifies for the Homestead Rate?

To qualify as a primary residence, you must meet a few criteria:

• You own and occupy the property as your main home as of April 1 of the given year.
• You are a legal resident of Vermont.
• You are not claiming a homestead exemption in another state.

This applies even if you own multiple properties. You can only declare one property as your homestead.

How to Declare Your Vermont Homestead

Each year, Vermont requires homeowners to file a Homestead Declaration (HS-122) with their state tax return. If you qualify, you may also be eligible for a Property Tax Credit based on household income.

If you miss the deadline or forget to file, your home will be taxed at the higher non-homestead rate—even if you live there full-time.

What If You Move Mid-Year?

If you move out or sell your home during the year, it doesn’t change your status as of April 1. The state bases your homestead eligibility for the full tax year on where you lived on that date.

If you sell your primary residence and buy another one, you’ll need to update your homestead declaration the following year for your new address.

What If You Rent Out Part of Your Home?

You can still declare your property as a homestead if you live in one unit and rent out the rest. This is common with duplexes and accessory dwelling units (ADUs). You’ll still receive the lower tax rate for the portion you occupy.

However, if you rent out the entire property—even short-term—you likely won’t qualify for the homestead rate for that year.

Why This Matters

The homestead declaration isn't just a bureaucratic form—it directly affects your annual property tax bill. For many homeowners, filing it correctly means saving hundreds to thousands of dollars each year. It also ensures you're eligible for income-based tax credits.

If you're buying a home in Vermont, talk to your realtor early about how and when to file. If you're selling, it's good to know how your declaration—or lack of one—may affect closing costs and taxes.

Where to File

You can file your Homestead Declaration online through the MyVTax portal, or with your tax preparer when you submit your Vermont income tax return. The form typically opens in January and is due by April 15.

If you're unsure, Bruce Allen can help walk you through what’s required and make sure everything’s handled correctly.