Bill S.280 proposes the establishment of a new property tax classification system in Vermont, specifically targeting residential properties used as second homes and short-term rentals. The bill introduces a new classification for nonhomestead seasonal residential properties, which will be taxed similarly to nonhomestead nonresidential properties. The increased tax revenue generated from these classifications will be allocated to a newly created School Construction Aid Special Fund, aimed at supporting school construction projects and related initiatives. The bill outlines the responsibilities of town listers and assessors in updating property classifications annually and provides definitions for various property types, including homestead, nonhomestead residential, and nonhomestead seasonal.

Additionally, the bill amends existing tax rates, establishing a higher rate of $2.00 per $100 for nonhomestead residential properties, while maintaining the current rates for homestead and nonhomestead nonresidential properties. It also specifies that half of the revenue from the education property tax on nonhomestead residential properties will be directed to the School Construction Aid Special Fund. The bill includes provisions for the transition to the new classification system, requiring the Commissioner of Taxes to collect data on property use and publish guidance on the new definitions by August 1, 2027, with the full implementation of the new tax classifications and rates set for January 1, 2028.

Statutes affected:
As Introduced: 32-4152, 32-5402, 32-5402b, 16-4025