Whether you’re the grantor or the grantee in a Vermont property transfer via a quitclaim deed, you should familiarize yourself with the associated fees and taxes.
Filing Fees
Per Vt. Stat. Tit. 32 § 1671, town clerks charge $15 per page for filing documents like quitclaim deeds that will become a matter of public records. The tax form that must accompany every quitclaim deed, Form PTT-172, costs an additional $15 to file.
Taxes
1. Real Estate Transfer Tax
Per Vt. Stat. Tit. 32 § 9602, the state imposes a tax on the transfer of title to real property. All deeds transferring property (even if the transaction doesn’t involve the exchange of money) require a property transfer tax return (Form PTT-172) to be filed along with the deed to the town clerk.
Who Pays the Transfer Tax?
Generally, the grantee (or the person receiving the property) is responsible for paying the transfer tax in Vermont. This requirement differs from other states in which the grantor is responsible.
Exemptions to Transfer Tax
Vt. Stat. Tit. 32 § 9603 outlines some transfers that are exempt from the transfer tax. Examples include the following:
- Transfers between spouses or direct family
- Transfers to government agencies
- Transfers made only to correct a title defect
- Transfers that change the type of ownership without changing the actual owner
- Transfers made between a subsidiary and its parent corporation
- Transfers made to or by a local development corporation
- Transfers made to a 501(c)(3) nonprofit organization
- Transfers made in lieu of a foreclosure
Tax Rates
The property transfer tax rate is 1.25% of the property’s value or $1.00, whichever is greater. Some exceptions exist. For example, when the grantee plans to use the transferred property as their principal residence, the tax rate is 0.50% for the first $100,000 of the property’s value. Any portion over $100,000 is subject to a tax rate of 1.25% (Vt. Stat. Tit. 32 § 9602).
Furthermore, the state will not impose any tax on the first $110,000 in value of any property transferred if the grantee purchases the property as a principal residence with assistance from the Vermont Housing and Financing Agency (VHFA), Vermont Housing and Conservation Trust Fund (HCTF), or US Department of Agriculture (USDA). Any portion over $110,000 will be subject to a tax rate of 1.25%.
2. US Gift Tax (Form 709)
There is no state gift tax in Vermont, but the grantor must pay federal gift tax in some scenarios when they give property to a grantee for little or no payment. They can use IRS Form 709 to determine the exact amount.
Annual exclusions will apply. For example, in 2024, a grantor can give up to $18,000 of property to each recipient without having to pay gift tax.
3. Capital Gains Tax
Vermonters transferring property through a quitclaim deed may owe both state and federal capital gains taxes. IRS Topic No. 409 and IRS Publication 551 describe the federal capital gains tax.
Within Vermont, capital gains are usually subject to regular personal income tax rates, ranging from 3.35% to 8.75%. Some long-term gains may be exempt from capital gains tax. The Vermont Department of Taxes details capital gains exclusions.
