As Vermont’s Legislature shifts into high gear amid pressing fiscal challenges, discussions on the Property Tax Yield Bill have begun in earnest. This bill is central to determining statewide property tax rates using a funding formula, school budget votes, and other key factors.

In Vermont, the overall property tax framework rests on two pillars—the Municipal Tax Rate and the Education Tax Rate—and applies to two property classifications: homestead properties (the owner-occupied principal dwelling and its surrounding land) and non-homestead properties, such as rental units and commercial spaces. The education tax rate for non-homestead properties differs from that for homesteads. With affordability concerns reaching a critical point across the state, the Vermont Chamber advocates for a uniform bill change that equalizes the impact on both homestead and non-homestead taxpayers.

What Is Being Considered

Based on the Education Fund outlook for fiscal year 2026, several scenarios are under debate by the House Ways and Means Committee. Under these scenarios, the homestead property tax rate is projected to range from $1.577 to $1.677 per $100 of assessed value, while the non-homestead rate is expected to vary between $1.703 and $1.791 per $100.

A significant factor influencing these projections is the Administration’s one-time $77.2 million General Fund transfer. The House Ways and Means Committee is exploring different approaches for this transfer—options include applying the full amount directly to reduce tax bills or allocating half of it to a transition reserve.

The Vermont Chamber’s Advocacy

Amid these evolving discussions, the Vermont Chamber continues to advocate for a uniform bill change that ensures an equal impact on both homestead and non-homestead taxpayers. This approach aims to provide greater clarity and predictability for both businesses and households across Vermont.

With the crossover deadline for fiscal policy looming next week and legislative debates intensifying around education finance and broader systemic challenges, the decisions made in Montpelier will resonate statewide. The Vermont Chamber remains committed to championing data-informed solutions that support robust economic growth and a balanced tax environment.