Ways & Means reviews draft to split non‑homestead property tax into use‑based classes

Legislative counsel on the House Ways & Means Committee presented draft statutory language to require town grand lists to assign each parcel of real property a statutory classification and to allow the General Assembly to set separate non‑homestead education tax rates for those classes.

The draft, presented by Kirby Keaton, legislative counsel, would insert a new statutory section (referred to in the draft as 4152A) requiring towns’ grand lists to include a single assigned classification for each parcel and defining categories for non‑homestead property. Keaton said the classifications are intended to let the Legislature “fine tune the tax liability for different groups within that non‑homestead category.”

Why it matters: The proposal would change how non‑homestead property — currently taxed under a single non‑homestead rate — is grouped for education property tax purposes. That could let lawmakers tax high‑value second homes, short‑term lodging, apartments, farms or resorts at different rates than other non‑homestead parcels, potentially shifting who pays how much toward school funding.

Key features of the draft

- Required classification on the grand list: The draft would add a statutory requirement that municipal grand lists carry a statutory classification for each parcel and provide a process for state rules to supplement the statute.

- Defined classes (draft language): residential A; residential B; apartment; affordable housing; commercial; industrial; resort; undeveloped; public use. Keaton said the draft borrows ideas from classification systems used in places such as Hawaii and New York but is adapted to Vermont’s…