Ways & Means panel evaluates switch from income-based property tax credit to homestead exemption

BURLINGTON — The House Ways & Means Committee spent its Feb. 26 meeting focused on proposed changes to Vermont’s property tax relief system, hearing testimony that a move from the existing income‑sensitive property tax credit to a homestead exemption could increase tax burdens for lower‑income and fixed‑income homeowners.

Karen Lafayette, who identified herself as a representative of the Vermont Low Income Advocacy Council, told the committee the administration’s proposal — which would replace the income‑based credit with a homestead exemption capped at $200,000 of house value — “increases the taxes of the lowest income Vermonters the most” unless their homes are valued under the exemption cap. Lafayette argued the state should maintain and update income sensitivity rather than shift to a value‑based exemption.

Lafayette said the policy under consideration reverses the intent of Act 60, the 1990s statute that moved school funding from a strictly local property tax to a statewide formula and created income sensitivity so many Vermonters pay education taxes based on household…