Carol sold Vermont land she purchased three years ago for a significant gain. Her attorney advises her that the Vermont Land Gains Tax applies. Carol argues that because she lived on the property as her primary residence for the past 18 months, she should be fully exempt from the tax. Under 32 V.S.A. Chapter 236, is Carol's argument correct?
Correct Answer
D) No, the primary residence exemption requires the seller to have used the property as a principal residence for more than two years, and 18 months does not satisfy this requirement
Under 32 V.S.A. Chapter 236, the Vermont Land Gains Tax exemption for a principal residence requires that the seller have used the property as a principal residence for more than two years. Carol's 18-month residency does not meet this threshold, so she does not qualify for the exemption and the Land Gains Tax applies to her sale.
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Related Topics & Key Terms
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Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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