An act relating to a homestead property tax exemption for long-term residents who are 65 years of age or older

2025-2026 Regular Session Introduced by Chris Mattos

Vermont would grant a long-term resident 65+ a phased homestead education tax exemption, reaching full exemption by FY 2030 for eligible homes.

Read 1st time & referred to Committee on Finance

Summary of S.315 (2025-2026) – Vermont

Purpose and intent

The bill proposes creating a homestead property tax exemption for long-term Vermont residents who are 65 years of age or older.

The exemption would be phased in over four years, with full exemption for eligible individuals beginning in fiscal year 2030.

The act focuses on the education property tax paid on a homestead declared under Vermont law.

Key provisions and changes

Section 3802 amendment:

Adds a new exemption (23) for a homestead declared under section 5410 if the declarant meets both:
Age: 65 or older as of December 31 of the taxable year.
Residency: Domiciled in Vermont for at least 10 consecutive years.

Transition (phased approach) for current and future eligibility:

For fiscal years 2027–2029, the exemption applies under a transitional framework, even though the standard exemption would apply only later.
For homestead properties declared under section 5410 in those years, the education property tax would be calculated using a staged reduction in tax liability, not a full exemption, subject to the following years:
FY 2027: 75 percent of the education property tax value is taxed (i.e., the resident pays 25% of the tax that would otherwise be due).
FY 2028: 50 percent of the education property tax value is taxed (i.e., the resident pays 50% of the tax that would otherwise be due).
FY 2029: 25 percent of the education property tax value is taxed (i.e., the resident pays 75% reduction).
In all transition years, the municipal legislative body determines the homestead rate for the fiscal year (per 32 V.S.A. § 5402(b)(1)) and applies it to the applicable percentage of the homestead grand list value.

Effective date:

The act would take effect on July 1, 2026.

Who is affected

Eligible individuals: Vermonters who own and declare a homestead under Vermont law (section 5410) and who meet both:

Age 65 or older by December 31 of the taxable year.
10 consecutive years of domicile in Vermont.

Municipalities: Local taxing authorities would implement the transitional phase in FY 2027–FY 2029 and then apply the full exemption once fully phased in (FY 2030 and beyond).

Timeline and procedural notes

Introduction and first reading: January 27, 2026.

Referred to the Senate Committee on Finance for consideration.

Transitional funding/taxation approach spans fiscal years 2027–2029.

Full exemption would be in place starting fiscal year 2030, assuming passage and no changes to the phased schedule.

Practical impact (summary)

Long-term residents aged 65+ with 10+ years of Vermont domicile could see a substantial reduction in their education property tax on their primary residence.

The exemption is phased in over four years to ease fiscal impact on local school budgets and tax bases.

By FY 2030, eligible seniors would be fully exempt from the homestead education property tax for the applicable property.