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S.10

Introduced by   Senator Sears of Bennington District

Referred to Committee on

Date:

Subject:  Taxation; property tax; proration of property taxes upon sale

Statement of purpose:  This bill proposes to change the reference date from the fiscal year to the property tax billing year for purposes of calculating the proration of property taxes at time of sale.

AN ACT RELATING TO PRORATION OF PROPERTY TAXES BASED ON BILLING YEAR

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  27 V.S.A. § 309(a) is amended to read:

(a)  Unless otherwise expressly stated or agreed, in any offer or contract for the purchase and sale of real property, real property taxes assessed and payable shall be prorated as follows so that as between the parties, but not otherwise:

(1)  In municipalities where the municipal tax and the school tax fiscal periods are July 1 to June 30, the seller shall bear the burden of real estate taxes allocable to the period beginning July 1 of that fiscal year and ending on the day before closing.  The buyer shall bear the burden of real estate taxes allocable to the period beginning with the day of closing and ending on June 30.

(2)  In municipalities where the municipal tax fiscal period is other than July 1 to June 30, the seller shall bear the burden of real estate taxes allocable to municipal taxes for the period beginning on the first day of the municipality's fiscal year and ending on the day before closing.  The seller shall also bear the burden for real estate taxes allocable to school taxes for the period beginning July 1 of that fiscal year and ending on the day before closing.  The buyer shall bear the burden of real estate taxes allocable to both school and municipal taxes for the period beginning with the day of closing and ending with the last day of the respective fiscal year.

the parties shall prorate between themselves but not otherwise the real property taxes assessed during the current billing year, so that the buyer shall bear a fraction of the burden of real estate taxes due during the current billing year.  The buyer’s share of the taxes shall equal the number of days that the buyer will have title or will be vested in possession of the real estate, whichever shall occur first, divided by the total number of days in the current billing year, 365 or 366.  As used in this section, “current billing year” means the annual property tax billing cycle during which the buyer takes title or becomes vested in possession, and which cycle began with the town’s first property tax payment due date for that assessment.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us