OWNERSHIP SITUATIONS
Homeowner Age 62 or Older in 2021
If the homeowner shares ownership of the homestead with his or her descendant(s), the homeowner may claim 100% ownership interest on the Property Tax Adjustment Claim, even if the other owners (descendants) do not live in the homestead. A letter of explanation may be requested.
Divorced or Legally Separated Joint Owners
When the divorce decree or court order has declared a specific percentage of home ownership for the purpose of property taxes, you must use that percentage if the following apply: (1) you are divorced or legally separated from your spouse/civil union partner; (2) your name and the name of the spouse/ civil union partner from whom you are divorced or legally separated remain on the deed; and (3) you are awarded possession of the home. If the divorce decree or court order does not specify responsibility for the property taxes, the person residing in the homestead uses 50% ownership interest. The person not living in the homestead cannot make a Property Tax Adjustment Claim.
The Department may ask for a copy of the portions of the court documents showing the court, date filed, signature page, and the homestead-related provisions.
Duplex Housing
Both owners occupy the building as their principal residence. The eligible housesite education property tax is the tax on the portion owned by each homeowner. If the town issues a property tax bill to each homeowner for his or her portion of the homestead, use the housesite value, housesite property tax, and 100% ownership interest. If the property tax bill is for the total property, prorate the housesite value, housesite property tax, and ownership interest.
Only one owner occupies the building as his or her principal residence. The owner occupying the duplex as his or her principal residence must prorate for the other owner’s interest.
Entity Ownership
Property owned by a C or S corporation, partnership, or limited liability company cannot be claimed as an individual’s homestead and is not eligible for property tax adjustment. There is an exception for a homestead located on a farm. Read Reg. § 1.5401(7)-Homestead at www.bit.ly/vttaxregs.
Life Estate
A person who holds a life estate interest in a property that he or she occupies as a principal residence may make a Property Tax Adjustment Claim as if the life estate holder was the owner of the property. The deed does not have to be attached to the Property Tax Adjustment Claim but must be available for review upon Department request.
Trust Ownership
A dwelling owned by a trust is not the homestead of the beneficiary unless the claimant is the sole beneficiary of the trust and one of the following:
1. The claimant or the claimant’s spouse was the grantor of the trust, and the trust is revocable or became irrevocable solely by reason of the grantor’s death; OR
2. The claimant is the parent, grandparent, child, grandchild or sibling of the grantor; the claimant is mentally disabled or severely physically disabled; and the grantor’s modified adjusted gross income is included in the household income calculation.
The term “sole beneficiary” is satisfied if the homeowner and the spouse/civil union partner are the only beneficiaries of the trust. A property owned by an irrevocable trust cannot be a homestead except as stated in (1) above. The trust document does not have to be attached to the Property Tax Adjustment Claim but must be available for review upon Department request.