Land and Building
Lots Information You Should Know
Land Gains Tax
For Owners of Vermont land, who are thinking of Selling, something
to consider is the current Vermont Law regarding “Land Gains”. How
long have you owned the land? If you have owned the land for at
least or more than 6 yrs, you will NOT incur a tax event…regardless
of any profit with this Land Gains Tax. If less than that, the State
will take a portion of any monetary gain/profit you may make upon
the sale of that land. There is a sliding scale of taxes due
depending on the length of time owned. Of course if there is no gain
that occurs within that sale, there should be no tax.
The 3 pages below starting with the next page are from the State’s
Website. Do review thoroughly. The website to go to is:
http://www.state.vt.us/tax/pvr.shtml This site offers
information that will affect your transaction, tax wise, if the land
was held less than 6 yrs and there was a gain at the sale.
2.5% WITHHOLDING of VT Property Transactions
While we’re on the State tax ramifications for land sales, there is
also the potential for a “Withholding” event of any property sale in
Vermont, if you are an “Out of State Seller”. The State will require
the Purchaser’s of VT Real Estate to WITHHOLD 2.5% of the sale price
of the property, upon the closing, of Out of State Seller’s
Proceeds, and sending to the State, unless the Seller can provide
the “Exemption Certificate” as received from the State which proves
that the Seller does not owe the State of Vermont any monies.
Therefore, I suggest that all out of State Seller’s apply early for
their exemption certificate if qualifying so they are not
disappointed in the fact that they would not receive all they
thought they would upon the closing. Otherwise, the refund is
applied for at annual tax time, by filing a State return. Or a
Seller my file for an early refund by supplying the State Tax
Department with the information necessary as required by the State.
When and if you qualify and would like to file for an early refund
or exemption certificate you will need the Certificate from the
State, as noted just below, this is also from the State’s webpage:
“The Vermont Department of Taxes will implement the following policy
in order to effectively administer the issuance of real estate
withholding and land gains tax certificates.
Real estate withholding and land gains tax certificates will be
issued according to the date/time of receipt of a complete request
on a first come-first serve basis, but not more than five business
days after receipt. The department cannot allow any exceptions to
this policy. Certificate filers are strongly urged to schedule
closings and other events requiring certificates in accord with this
policy. Certificates will be faxed or mailed to the originator of
This policy is effective as of 6/22/09.
If you have any questions, please call Mike Piwowarski at