A Vermont seller purchased a vacant lot in Stowe for $80,000 three years ago and is now selling it for $120,000, realizing a 50% gain. Which Vermont-specific tax will the seller be required to pay at closing that would NOT apply if the seller had owned the property for six or more years?
Correct Answer
B) Vermont Land Gains Tax
Under 32 V.S.A. Chapter 236, the Vermont Land Gains Tax is imposed on gains from the sale of Vermont land held for fewer than six years. The seller purchased the lot three years ago, so the holding period triggers this tax. The tax rate depends on both the holding period and the percentage gain realized. If the seller had held the property for six or more years, the Land Gains Tax would not apply.
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