Committee reviews H.479 amendments: first-generation credit sunset, down‑payment assistance extended; 1% short‑term rental tax removed

Cameron Wood of the Office of Legislative Counsel briefed the House Health and Housing committee Wednesday on two amendments to H.479, the committee’s omnibus housing bill, and the Appropriations Committee’s recommendation to substitute its amendment for the Ways and Means report.

Wood told the committee the Ways and Means amendment makes two substantive changes: it extends the existing down‑payment assistance tax credit for five years, through fiscal 2031, and it would add a five‑year sunset to the newly proposed Vermont Housing Finance Agency (VHFA) first‑generation home buyer tax credit. “The first generation home‑buyer tax credit did not have an expiration as it came out of this committee. Ways and Means was proposing to put a sunset on that of five years,” Wood said. He also said the Ways and Means amendment removes a section that would have given municipalities authority to impose an additional 1% tax on short‑term rentals, and it adjusts effective dates tied to the sunset language.

Committee staff said the first instance of the Ways and Means amendment is a technical cleanup and does not change the enacted language; the second instance is the substantive change that sunsets VHFA’s first‑generation credit after five years. Wood described the down‑payment assistance program as a revolving fund that requires more time to become self‑sustaining; testimony to the committee included a statement that the program’s loans are repaid on refinancing or sale of the house, which drove a request for a five‑year extension.

Later the Appropriations Committee recommended substituting its amendment for the Ways and Means report. Appropriations’ change removed most appropriations from H.479 so the funding could be consolidated in the budget; that substitution also struck the VHFA tax‑credit section (section 6) and removed the municipal 1% short‑term rental tax (section 16). Appropriations also removed a $250,000 appropriation tied to a VHFA off‑site housing construction study but preserved the reporting requirement contingent on funding.

Committee discussion centered on the difference between the revolving down‑payment program and the first‑generation grant program — the committee chair noted the down‑payment assistance is intended as a revolving loan fund and that program’s sponsors asked for an additional five years to allow the fund to recycle loan repayments. The first‑generation program described in committee materials was characterized as a grant of up to $15,000 per household to “buy down” home price and assist people who are first in their families to buy a home.

Votes at a glance - Ways and Means amendment (as presented to Health and Housing): Committee show‑of‑hands to report favorably on the Ways and Means amendment (reported by chair as 10 yes). Outcome: reported favorably to the House as noted in committee. (Source: committee show of hands on March 20, 2025.) - Appropriations Committee recommendation to substitute its amendment for the Ways and Means report: Committee reported the Appropriations recommendation to the House (committee recorded a favorable show‑of‑hands; exact recorded tally was announced by the chair during the meeting). Outcome: Appropriations recommendation forwarded to the House for consideration.

What remains next: If the committee reports the Appropriations substitution favorably to the full House and the House concurs, the amendment language will follow the constitutionally prescribed path for H.479 as a bill with appropriations removed and the budget implementing the funding. If the House declines to concur, the normal floor procedures would apply for further action.

Ending: Committee members said they were disappointed at some funding changes but expressed interest in advancing the bill’s policy elements and returning to unresolved items in future sessions. The committee scheduled further work on related Senate language later in the morning.