Vermont Homestead Exemption: Declaration, Deadline and Tax Credit

Vermont does not currently have a homestead exemption that takes a dollar amount off your home's value. Instead, every Vermont homeowner who lives in the home as a primary residence must file a Homestead Declaration each year under 32 V.S.A. § 5410, so the home is taxed at the homestead education property tax rate rather than the nonhomestead rate. The declaration goes to the Vermont Department of Taxes on Form HS-122, and for the 2026 filing it was due April 15, 2026. The same form is used to claim Vermont's income-based Property Tax Credit, which the Department lists at a maximum of $8,000 for 2026. For other states, see our guide to homestead exemptions by state.

Information last verified on 2026-10-08. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Vermont's Homestead Declaration and education property tax classification (32 V.S.A. §§ 5401, 5402 and 5410), the Property Tax Credit (32 V.S.A. chapter 154), the veterans exemption in 32 V.S.A. § 3802(11), the future homestead exemption in Act 73 of 2025, and the creditor homestead in 27 V.S.A. chapter 3. It does not cover other town-voted local exemptions, homestead education rates for individual towns, municipal property tax rates, business or rental property, renters, or the law of other states. Figures are for the 2026 filing year and fiscal year 2027 unless stated otherwise.

Does Vermont have a homestead exemption?

Not in the sense most states use the term. Vermont does not subtract a set dollar amount from a home's assessed value for property tax. It has two linked statewide programs instead: the Homestead Declaration, which sets which education tax rate applies to your home, and the Property Tax Credit, which reduces the bill for households under an income limit.

The Department of Taxes explains the starting point: "In Vermont, all property is subject to education property tax to pay for the state's schools. For this purpose, the property is categorized as either nonhomestead or homestead." It adds that "All property is considered nonhomestead, unless it is declared as a homestead."

The declaration does not cap or lower your assessed value. The Form HS-122 instructions describe it as a rate classification: "A Vermont homestead is taxed at the homestead education property tax rate, while a different education property tax rate applies to nonhomestead property (previously known as the "nonresidential" rate)." It affects the statewide education property tax only; your town's municipal property tax is separate.

Homestead and nonhomestead tax rates

Vermont does not publish a single statewide homestead rate. Under 32 V.S.A. § 5402, each municipality's homestead education rate depends on its own education spending and its common level of appraisal, so the rate on your bill depends on where you live.

The nonhomestead rate is set statewide. For fiscal year 2027, Act 169 of 2026 provides that "the nonhomestead property tax rate shall be $1.643 per $100.00 of equalized education property value." The same act set the fiscal year 2027 property dollar equivalent yield at $9,401 and the income dollar equivalent yield at $12,960.

Who must file a Homestead Declaration?

You file if you own and occupy a Vermont home as your domicile as of April 1. Section 5401 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."

The Department of Taxes lists property that is nonhomestead, which means it should not be declared:

• Property leased for more than 182 days out of the calendar year.
• Property used exclusively for commercial purposes, including rental.
• A second home, camp, vacation home or summer cottage.

For jointly owned property, one owner-occupant files the declaration.

How and when to file the Homestead Declaration

File Form HS-122 (Section A is the Homestead Declaration) online through myVTax at no cost, or on paper. Paper returns go to the Vermont Department of Taxes, PO Box 1881, Montpelier, VT 05601-1881.

You file every year. The HS-122 instructions state: "The Homestead Declaration must be filed each year by Vermont residents for purposes of the state education tax rate." The Department adds: "Even if a person is not required to file a Vermont Income Tax Return, the declaration must be filed by the deadline." Extending your income tax return does not extend this deadline.

For the 2026 filing year, the declaration was due April 15, 2026. Late filers are treated this way under the 2026 HS-122 instructions:

• Filed after April 15, 2026 and by October 15, 2026: the property is still classified as homestead, but the town may assess a penalty of up to 3% if the nonhomestead rate is higher than the homestead education rate, or up to 8% if the nonhomestead rate is lower.
• Filed after October 15, 2026: the property is classified as nonhomestead, and the Department of Taxes says the owner then must pay the higher of the two rates, a penalty, and any additional property tax and interest due. Under 32 V.S.A. § 5410(i), an owner who files after October 15 gets no refund from the corrected classification, and the additional tax and interest are collected as a penalty.

If you filed for 2026 and then sold the home before April 1, 2026, the instructions direct you to withdraw the declaration and credit claim on Form HS-122W.

The Vermont Property Tax Credit

The Property Tax Credit is the income-sensitive part of the system, under 32 V.S.A. chapter 154. The HS-122 instructions state: "The maximum 2026 Property Tax Credit is $8,000. The Property Tax Credit will appear as a state payment on your 2026/2027 property tax bill." Act 169 of 2026 raises the credit's statutory caps and its lower-income threshold for fiscal year 2028 and later, so check the Department of Taxes for the figures that apply to the next claim.

For the 2026 claim, the instructions list these requirements:

• The property is declared as your homestead.
• You were domiciled in Vermont for the entire 2025 calendar year.
• You owned the home as your principal residence on April 1, 2026.
• No one could claim you as a dependent for 2025.
• Your household income is $115,400 or less.

The credit is computed from the statewide education tax on your housesite and your household income, under 32 V.S.A. § 6066. Lower-income households can also receive credit against municipal property tax. The Department of Taxes then notifies your municipality of the credit amount, and the town applies it to your bill.

You claim it in Section B of the same Form HS-122, together with Schedule HI-144 (Household Income). The instructions state that "Schedule HI-144 must be submitted with Form HS-122." The 2026 claim was due April 15, 2026, and the instructions add that "2026 Property Tax Credits filed after Oct. 15, 2026, generally cannot be accepted." The statute does leave one later route: under 32 V.S.A. § 6068(b), if the home was declared a homestead by October 15, a credit claim filed after October 15 but by March 15 of the following year is reduced by $150 and issued directly to the claimant instead of through an adjusted town tax bill. Under § 6068(c), no claim may be made after that March 15. You claim the credit again each year.

Property tax exemption for disabled veterans

32 V.S.A. § 3802(11) exempts "Real and personal property to the extent of $10,000.00 of appraisal value, except any part used for business or rental, occupied as the established residence of and owned in fee simple by a veteran, the veteran's spouse, widow, widower, or child," when the veteran receives disability compensation for at least a 50 percent disability, or the household receives death compensation, dependency and indemnity compensation, or a disability pension.

The exemption is not automatic. Under § 3802(11), the application and a written statement from the Military Department or the Veterans Administration showing that the compensation or pension is being paid must be filed with the Office of Veterans Affairs before May 1 of each year. For an exemption based on a permanent disability, the application is filed only once, before May 1 of the first year, and the exemption stays on the grand list until title to the property is transferred. The Department of Taxes covers this program in its fact sheet FS-1003, Property Tax Assistance for Veterans.

The same subdivision entitles an unremarried widow or widower of a previously qualified veteran to the exemption whether or not they receive compensation or a pension. It also lets a town, by majority vote at a warned annual or special meeting, raise the exemption to as much as $40,000 of appraisal value.

Penalties for an incorrect declaration

If you declare a property that is not your homestead, or fail to declare one that is, 32 V.S.A. § 5410 provides that "the Commissioner shall notify the municipality, and the municipality shall issue a corrected tax bill that 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 penalty can be up to 8 percent for a property wrongly declared as a homestead in a town whose homestead rate is lower than its nonhomestead rate, or for an undeclared homestead in a town whose nonhomestead rate is lower than its homestead rate.

A declaration made with fraudulent intent carries a penalty equal to 100 percent of the education tax, plus interest and fees. If you declared in error, or the home is sold, converted or rented for more than 182 days, you withdraw the declaration on Form HS-122W.

Moving or buying a home

Homestead status does not move with you. It turns on who owns and occupies the property as a domicile on April 1 each year, so a buyer files a new declaration for the new home and a seller who already filed for a home sold before April 1 withdraws on Form HS-122W.

The future homestead exemption under Act 73

Vermont has enacted a change that would bring a true homestead exemption, but it is not in effect. The legislature's summary of Act 73 of 2025 says that, as contingently effective, the act "repeals the statewide property tax credit and replaces it with a capped homestead exemption that reduces the portion of housesite value subject to the statewide education tax and supplemental district spending tax."

Act 73 made the change contingently effective July 1, 2028. Act 170 of 2026 (Sec. 18) rewrote those contingencies, and its enacted text strikes July 1, 2028 and inserts July 1, 2029; the legislature's summary says Act 170 delays the effective date by one year. The change still takes effect only if the conditions in Act 170 are met, which call for specified reports to the General Assembly and further legislation on school funding. Until the change takes effect, the Homestead Declaration and the Property Tax Credit described above are the system in use. Check the Department of Taxes before each filing season.

Does the Vermont homestead protect your home from creditors?

The Homestead Declaration is a tax filing and gives no protection from creditors. Creditor protection comes from a different law, 27 V.S.A. § 101: "The homestead of a natural person consisting of 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 together with the rents, issues, profits, and products thereof, shall be exempt from attachment and execution except as otherwise provided in this chapter."

The limit is a value limit, not an acreage limit. When a creditor levies on a larger parcel, the owner may designate the part of the land, up to the value limit, that the exemption covers. Nothing in 27 V.S.A. chapter 3 requires you to record a declaration; the protection comes from owning and using the property as a homestead.

The exemption has exceptions written into chapter 3:

• Taxes: "Like other real estate, a homestead shall be liable for the payment of taxes assessed thereon" (§ 108).
• Earlier debts: the homestead can be attached for causes of action that existed when it was acquired (§ 107).
• Mortgages: § 103 governs how a mortgage on the homestead and other real estate is satisfied.
• Spouses: a spouse must join in a conveyance or mortgage of the homestead (§ 141).
• New homestead: when you acquire a new homestead, the old one becomes liable for your debts, and a new homestead bought with the proceeds of the old one, or with other means not derived from your property, is not liable for claims the old one was protected from (§ 109).

In bankruptcy, the U.S. Bankruptcy Court for the District of Vermont's pro se guide describes nonexempt property as property not on "the Vermont exemptions or federal exemptions" list, so a debtor works from one of the two lists. Federal rules can limit a homestead claim in some cases. In bankruptcy, Vermont's exemptions generally apply if Vermont was your domicile for the 730 days before you file; if your domicile was not in one state for that whole period, the law of the state where you lived for most of the 180 days before it applies (11 U.S.C. § 522(b)(3)(A)). For how these rules work in a case, see our guide to bankruptcy in Vermont.

Homestead rights of a surviving spouse

When a homeowner dies leaving a surviving spouse, 27 V.S.A. § 105 provides that "the person's homestead to the value provided in this chapter shall pass to and vest in the surviving spouse without being subject to the payment of debts of the deceased, unless legally charged on the homestead in the person's lifetime." The Probate Division of the Superior Court handling the estate sets out the homestead to the surviving spouse. For how this fits into an estate, see our guide to probate in Vermont.

Related

• Homestead exemptions by state
• Vermont bankruptcy laws
• Vermont probate
• Vermont property records

This article provides general legal information about Vermont law, including 32 V.S.A. §§ 5401, 5402, 5410, 6066 and 3802(11) and 27 V.S.A. § 101, as verified on 2026-10-08. It is not tax or legal advice. For your specific situation, contact the Vermont Department of Taxes, your town listers, or a lawyer licensed in Vermont.

Last updated: 2026-10-08.

Frequently Asked Questions

Does Vermont have a homestead exemption?

Not a dollar-off exemption today. Vermont requires an annual Homestead Declaration under 32 V.S.A. § 5410 so the home is taxed at the homestead education rate, and it offers an income-based Property Tax Credit of up to $8,000 for 2026. Act 73 of 2025 would create a capped homestead exemption only once a contingency is met.

When is the deadline to file the Homestead Declaration in Vermont?

For 2026, Form HS-122 was due April 15, 2026. A declaration filed by October 15, 2026 is still classified as homestead but may draw a town penalty of up to 3% or 8%, and one filed after October 15, 2026 is classified as nonhomestead, with the higher of the two rates, a penalty, and any additional tax and interest due, according to the Department of Taxes.

Do I have to file the Vermont Homestead Declaration every year?

Yes. The HS-122 instructions state that the declaration must be filed each year by Vermont residents, and the Department of Taxes says it must be filed even by people who are not required to file a Vermont income tax return.

What is the income limit for the Vermont Property Tax Credit?

For the 2026 claim, household income must be $115,400 or less, and the maximum credit is $8,000. You claim it on Form HS-122 with Schedule HI-144, and it appears as a state payment on the 2026/2027 property tax bill.

What happens if I miss the Homestead Declaration deadline in Vermont?

Under the 2026 HS-122 instructions, a late declaration filed by October 15, 2026 keeps homestead classification but the town may assess a penalty of up to 3% or up to 8%, depending on how the rates compare. After October 15, 2026 the property is classified as nonhomestead, and the Department of Taxes says the owner then must pay the higher of the two rates, a penalty, and any additional property tax and interest due.

Is there a property tax exemption for disabled veterans in Vermont?

Yes. 32 V.S.A. § 3802(11) exempts $10,000 of appraisal value (up to $40,000 where the town has voted an increase) of the residence of a veteran receiving compensation for at least a 50 percent disability, or of certain survivors, with an application filed with the Office of Veterans Affairs before May 1.

Does the Vermont homestead protect my house from creditors?

The Homestead Declaration does not. A separate law, 27 V.S.A. § 101, exempts a homestead worth up to $125,000 from attachment and execution, but the home remains liable for property taxes and for debts that existed when it was acquired.