Peter Rinaldi, a Florida resident and part-time Vermont homeowner, says a recent increase in the state’s property transfer tax has prompted him and his wife to abandon plans to purchase another property in Vermont and instead seek real estate elsewhere. The tax, which rose significantly on August 1, 2024, now stands at 3.62% for non-principal residences, including a clean water surcharge.
Rinaldi, who spends six months of the year in Vermont, detailed his decision in a letter to the editor of VTDigger, explaining that the tax increase effectively adds $8,000 to $12,000 to the cost of buying a home. He had hoped to replace a condo in Moretown, purchased in January 2023 when the transfer tax was 1.25%, with a more accessible property due to mobility issues.
The change in the property transfer tax stems from the passage of Act 181 (H.687) in 2024, which was subsequently overridden after a veto by Governor Scott, according to reporting by mrvre.com. Prior to August 1, 2024, the tax for non-homestead properties was 1.25%, with a 0.22% clean water surcharge, totaling 1.47%. The recent rate of 3.4% plus the 0.22% surcharge brings the total to 3.62%.
The Vermont Department of Taxes outlines tiered rates for the property transfer tax. A 0.5% rate applies to the first $200,000 of a principal residence, exempt from the clean water surcharge. The general 1.25% tax plus the 0.22% surcharge applies to the value exceeding $200,000. However, for non-principal residences, the flat rate is 3.40%, increasing to 3.62% with the clean water surcharge.
Rinaldi’s concerns echo those raised by others in the real estate sector. David M. Dion of mrvre.com described the tax increase as a “bomb” that will “have an extraordinarily dampening effect on real estate sales” in areas like the Mad River Valley. A Facebook post by Peter Rinaldi also highlighted the impact of property taxes, noting an annual tax of $10,000 on a “crappy building” as an additional hurdle in a recent deal.
Rinaldi expressed skepticism that Vermont’s reliance on the ski industry and wealthy tourists will be sufficient for economic growth, pointing to signs of economic stress in communities like Newport, White River Junction, and Rutland. He cited dilapidated properties and a lack of prosperity as evidence of broader economic challenges exacerbated by high taxes. He and his wife would consider full-time residency, he stated, “if it weren’t for the crazy tax situation.”
As of March 6, 2026, the Vermont legislature has not publicly addressed calls for a review of the property transfer tax rates.
