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Understanding Vermont’s Property Tax Credit for 2025: A Guide to Homestead Declaration and Eligibility

The Vermont Property Tax Credit helps many homeowners reduce their annual property tax bill—especially those who meet income thresholds and have filed a valid homestead declaration. In this guide, we’ll explore how to file a property tax credit claim, what the eligibility requirements are, and how to use forms HS-122 and HI-144 effectively. Whether you own a VT home in Barre, Montpelier, or the Green Mountains, understanding the 2025 process is key to saving money and staying compliant.

What Is the Vermont Property Tax Credit, and Who Is Eligible?

The property tax credit assists many Vermont homeowners with paying their property taxes by applying a benefit directly to their annual property tax bill. You may be eligible for a property tax credit if you meet income guidelines and file the required forms. This benefit helps offset the education property tax portion of your taxes, especially valuable in higher-tax areas like Burlington or Stowe.

Eligibility is based on your household income and whether you filed a homestead declaration. If your property qualifies as a homestead and you meet the eligibility requirements, you may claim this credit on your property taxes for the 2024 calendar year.

How Do I File a Homestead Declaration and Claim the Credit?

To claim the Vermont Property Tax Credit, you must file your homestead declaration and accompanying property tax credit claim form. This involves submitting Form HS-122 and Schedule HI-144 with your Vermont income tax return.

• HS-122: Declares your property as a homestead for tax purposes
• HI-144: Reports your total household income for the prior year

You can claim electronically via MyVTax or file by mail with the Department of Taxes. Filing ensures your property is taxed at the homestead education rate and makes you eligible for the credit if you qualify.

What Are the Income Thresholds for 2025?

Income thresholds for the 2025 tax year are adjusted annually. In general, households with total household income under $136,900 may qualify for a credit. The lower your income and higher your property tax, the greater the potential benefit.

Examples:

• Household income $50,000 with property tax of $4,000 → substantial credit possible
• Household income $120,000 → smaller or no credit, depending on tax rate and property details

You can estimate your potential savings using the tax credit calculator on the state’s official website.

When Is the Filing Due Date for the Vermont Property Tax Credit?

The due date for filing your property tax credit claim is April 15 along with your income tax return. You may still amend or file late through October 15, but late filings could delay your credit or affect how it's applied.

If your claim is approved, the credit will appear as a state payment on your property tax bill, typically reducing the education tax due in August.

Does My Property Qualify as a Homestead?

To qualify for the credit, your property must be declared as a homestead. This means it must be:

• Owned and occupied as your principal dwelling on April 1
• Located in Vermont
• Listed on the grand list under your name

If the homestead is leased to a tenant for more than 182 days of the year, it may not qualify. However, if you're in residence and only rent a portion, you may still claim the credit. The Department of Taxes provides clarification based on your situation.

How Much Is the Vermont Property Tax Credit Worth?

The credit is calculated based on the difference between a percentage of your household income and the education property tax on your home. The maximum credit for most filers is around $8,000, though the average is typically less.

Your credit depends on factors like:

• Your total household income from all sources
• The property tax rate in your town or school district
• Whether you're claiming any other exemptions or rebates

Each property tax credit claim is reviewed and adjusted by the state based on actual income and tax data.

What Forms Do I Need to File?

To file a complete declaration and property tax credit claim for 2025, you’ll need:

• Form HS-122: Homestead Declaration
• Schedule HI-144: Household Income
• Include these with your Vermont income tax return (IN-111)

You may also need Form RCC-146 or others depending on changes in ownership, lease status, or if your property is leased to a tenant on April 1.

Always double-check the state’s current instructions or consult a tax preparer for help with your property tax credit claim.

Frequently Asked Questions

• What is the Vermont Property Tax Credit?
  It’s a state program that helps eligible homeowners offset their property tax through income-based credits.
• What forms are required?
  You must submit HS-122 and HI-144 with your Vermont income tax return.
• What if I miss the April 15 deadline?
  You may still file through October 15, but your credit may be delayed.
• Do renters qualify?
  No, the credit is for homeowners whose principal dwelling and parcel are in Vermont.
• How will I receive the credit?
  It appears as a state payment on your tax bill, usually on the August installment.

Key Takeaways

• Property tax credit helps reduce education tax for eligible Vermont homeowners
• You must file HS-122 and HI-144 with your 2024 income tax return
• April 15 is the filing deadline, with an extension through October 15
• Credit is based on household income and property tax rates
• Use MyVTax to file electronically and check your credit status
• Visit our Ultimate Vermont Buyer’s Guide or explore current homes for sale