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Homestead Declarations and
Property Tax Adjustments

OWNERSHIP SITUATIONS

Age 62 or Older
If the Homeowner shares ownership of the housesite with his or her descendant(s), the full housesite value and property tax may be claimed, even if the other owners (descendants) are not members of the household. A letter of explanation may be requested.

Divorced or Legally Separated Joint Owners
If you are
(1) divorced or legally separated from your spouse, and
(2) the name of your former spouse or spouse from whom you are separated remains on the deed, and
(3) you are awarded possession of the home,
you can claim the percentage of the housesite property tax for which you are responsible under the final divorce decree or court order. If the divorce decree or court order does not specify responsibility for he property taxes, the person residing in the home declares the property as his or her homestead and is allowed 50% ownership of the housesite. The person not living in the home cannot make a property tax adjustment claim.

Examples:
(1)
Dan and Lynn are divorced/legally separated but both names stay on the deed. Lynn is given possession of the home and 100% responsibility for the property taxes. Lynn declares the property as her homestead on Form HS-122, Section A. She uses the housesite value and housesite property taxes from the property tax bill and enters 100% ownership interest on Form HS-122, Section B.

(2) Ethan and Myrna are divorced/legally separated but both names stay on the deed. Myrna has possession of the home and Ethan has 100% responsibility for the property taxes. Myrna declares the property as her homestead on Form HS-122, Section A. She cannot claim property tax adjustment as she is not responsible for the property taxes. Ethan cannot claim property tax adjustment as he does not live in the home.

(3)
James and Elizabeth are divorced/legally separated but both names stay on the deed. Elizabeth lives in the home, but the divorce decree/court order does not say who is responsible for the property taxes. Elizabeth declares the property as her homestead on Form HS-122, Section A. She uses the housesite value and housesite property taxes from the property tax bill and enters 50% ownership interest on Form HS-122, Section B. James cannot claim property tax adjustment as he does not live in the home.

These rules  also apply to ex-Civil Union partners upon dissolution.  You may be asked for a copy of the portions of the court document showing the court, date filed, signature page, and the housesite-related provisions.

Duplex Housing
- Both Owners Occupy As Their Principal Home: 
The eligible housesite property tax is the tax on the portion owned by each Homeowner. If the town issues a property tax bill to each Homeowner for only his or her portion of the housesite, use the
housesite value and property tax information on the bill. If the property tax bill is for the total property, the Homeowner uses the housesite value and property taxes pro rated for his or her ownership interest.

Examples: 
(1) Jack and Jill own a duplex and each occupy half as their principal home. The town sends them a property tax bill for their respective units.  Jack and Jill declare the property as their homestead on Form HS-122, Section A. They use the housesite value and housesite property taxes from their property tax bill and enter 100% ownership on Form HS-122, Section B Line B7.

(2) Sally and Sara own a duplex home and each occupies their half as their principal home. The town sends one property tax bill. Either Sally or Sara declares the property as a homestead on Form HS-122, Section A. They file separate property tax adjustments and use half of the housesite value on Form HS-122, Section B, Line B4, half the housesite property tax on Form HS-122, Section B, Line B5 (and if applicable B6) and enter 100% ownership interest on Form HS-122, Section B, Line B7.

- One Owner Does Not Occupy His Or Her Part As Their Principal Home: 
The owner occupying the building as his or her principal home pro rates ownership interest by the other owner's interest. 

Examples:
(1) Tom and Jerry own a duplex. Tom lives in the duplex but Jerry moved out and rents out his portion. The town issues a property tax bill to each owner. Tom declares the property as his homestead on Form HS-122, Section A. Since Jerry holds a half ownership interest in Tom's property, Tom uses the housesite value and housesite property tax from his property tax bill and enters 50% ownership on Form HS-122, Section B, Line B7.

(2) Jane and her brother Dick own a duplex. Dick occupies his portion of the property as his principal home. Jane rents her side of the duplex to others. The town issues one property tax bill for the property. Dick declares his portion of the property as a homestead on Form HS-122, Section A and enters 50% rental use on Form HS-122, Section A, Line A5. He uses half the housesite value and housesite property tax from the property bill on Form HS-122, Section B, Line B5 (and if applicable B6) and enters 50% ownership interest on Form HS-122, Section B Line B7 to adjust for Jane's 50% ownership in his property.

Entity Ownership
When an entity such as a C or S corporation, partnership or limited liability company owns the property, the property cannot be claimed as an individual's homestead. There is an exception for entity ownership of a farm. See Reg. 1.5401.

Life Estate
A person who holds a life estate interest in a property that he or she occupies as a principal home must declare the property as a homestead. Check Box A8 in Section A of Form HS-122. A life estate is an interest in the property conveyed through a deed and recorded in the town records. The deed does not have to be attached to Form HS-122 but must be available for review upon Department request.

Shared Ownership of the Housesite
When a housesite is owned by someone other than the Homeowner and member(s) of the household, the eligible property tax or housesite value is the percentage owned by the household members.

Examples:
(1) James, Grace and Lucinda jointly own a home and all live in the home. Lucinda is the Homeowner. She declares the property as a homestead on Section A of Form HS-122. She enters the amount found on the property tax bill for the housesite value on Form HS-122, Section B, Line B4, the housesite property tax on Form HS-122, Section B, Line B5 (and if applicable B6) and enters 100% ownership interest on Section B, Line B7 as all owners live in the home;

(2) Tim and Dan own a home. Tim lives in the home. Dan does not. Tim is the Homeowner. He declares the property as his homestead on Form HS-122, Section A. He enters the amount found on the property tax bill for the housesite value on Form HS-122, Section B, Line B4, the housesite property tax on Form HS-122, Section B, Line B5 (and if applicable B6) and enters 50% ownership interest on Form HS-122, Section B, Line B7 to adjust for ownership interest of Dan who does not live in the household.

Trust Ownership
A home owned by a trust is not a homestead unless it is the principal home of the grantor and sole beneficiary of the trust, and the trust is revocable or becomes irrevocable solely by reason of the grantor's death. The term "sole beneficiary" is satisfied if a husband and wife or civil union partners together are the only beneficiaries of the trust.  Check the box on Form HS-122, Section A, Line A7 if trust ownership meets this definition. The trust document does not have to be attached to Form HS-122 but must be available for review upon Department request.

 

 

 

File your Homestead Declaration and Property Tax Adjustment Online

More Information:
-2014 Adjustment worksheet
- Amending
- Buying & Selling Property
- Confidentiality
- Deceased Homeowner
- Definitions
- Delinquent Property Taxes
- Eligibility Requirements
- Extension of Time to File
- General Information
- Household Income
- Incomplete Filings
- Late Filing
- New Construction
- Nonresidential Use
- Offset of Adjustment
- Ownership Situations
- School District Codes
- SPAN
- Special Situations


 
Vermont Department of Taxes, 133 State Street, Montpelier, Vermont 05633-1401