Derek and Sandra are purchasing a lakefront vacation home in Vermont for $450,000. The property will not be their primary residence. What is the correct Vermont Property Transfer Tax rate that applies to this transaction, and who is responsible for paying it?
Correct Answer
A) Buyer pays 1.25% on the full $450,000 purchase price
Under 32 V.S.A. Chapter 231, the Vermont Property Transfer Tax is paid by the buyer. For properties that are NOT the buyer's primary residence, the tax is assessed at a flat rate of 1.25% on the full value of the property. Since Derek and Sandra are purchasing a vacation home (not a primary residence), the 1.25% flat rate applies to the entire $450,000, and the buyer is responsible for payment.
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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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