this tax does provide some revenue to the state, its main purpose is to discourage “speculation”, the holding of land for a short period and than selling it at a profit. Thus the tax rate is on a sliding scale based on the sellers holding period and the percentage the gain bears to the basis. The longer your holding period and the smaller your percentage, the less tax you pay. The number of paid returns has increased from 1983 in FY 2004, to 2232 in FY 2009. One staff member is assigned to administer this tax.
Revenue from this tax per fiscal year is as follows:
Real Estate Withholding This is a withholding tax on the sale or exchange of Real Estate by non residents of Vermont. The withholding is the responsibility of the buyer, but is a credit for the seller to be used on their income tax return. Gains from the sale of real estate are taxable to non- residents and the withholding is security to the state that an income tax return will be filed. The rate of withholding is 2.5% of the sales price. Certificates of reduced withholding are issued by the department, when the seller can establish no tax is due or that the 2.5% amount exceeds the seller’s maximum tax liability. Approximately 4000 returns are filed annually. One staff member is assigned to administer this tax.
Withholding revenue from this tax per fiscal year is as follows:
Real Estate Withholding Income Tax
This is a tax on income from capital gains on the sale of real estate by non residents. The withholding that occurred at sale is a credit against this tax and any balance is refunded to the taxpayer. If the withholding is not enough to cover the liability, the taxpayer pays the difference. Real Estate Withholding and the corresponding income tax return, insure that non- residents pay their fair share of tax on Vermont real estate sales. Approximately 3000 income returns are filed annually. Revenue figures from this tax are unavailable, as they are part of the over all income tax figures. One staff member is assigned to administer this tax.