A Vermont seller purchased a rural property four years ago for $200,000 and is now selling it for $280,000, representing a 40% gain. The seller has lived at the property as a principal residence for the entire four years. Which statement best describes the seller's Vermont Land Gains Tax liability?
Correct Answer
D) The seller is exempt from Land Gains Tax because the property is a principal residence held for more than two years
Under 32 V.S.A. Chapter 236, one of the key exemptions from the Vermont Land Gains Tax is for a seller's principal residence that has been owned and used as a principal residence for more than two years prior to the sale. Since the seller has lived at the property as a principal residence for four years, this exemption applies and no Land Gains Tax is owed, even though the holding period is under six years.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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