Preserving Vermont – Where Values still have Value

The most common comment I hear from people looking at real estate in Vermont is how Vermont looks and  feels so special and unique. There are many reasons for this beyond the obvious beauty of the State, the friendliness of its people and the varied cultural and recreational opportunities. Many of the reasons are a bit subliminal such as no billboards, the cleanliness and it’s iconic small villages. But there is also a solid foundation of legislative tools that have been implemented over the years to make sure that Vermont doesn’t make the mistakes of other once pristine regions and states.

In my opinion, there are three legislative acts that have been instrumental in preserving that which we hold dear in Vermont. They are Land Gains Tax, Act 250 and Current Use Program. All were established in response to conditions that were seen to be detrimental to the health of Vermont. In essence they all are closely linked to land development  in Vermont.

The Land Gains Tax

The Land Gains Tax was established at a time that development was rapidly growing in response to the need for second homes for primarily the ski industry. In essence, it is a fairly simple principal that makes it very difficult for anyone to buy a parcel of land, subdivide it and quickly sell off the individual lots at a large profit. It is a digressive tax that expires after six years. It is based on the length of time the property is owned and on the percentage of profit. This has stopped the quick exploitative speculation that has ruined vast amounts of land throughout the country.

Act 250 is the permitting process that is triggered by subdivisions and development in the state. when first enacted in the 1980’s, it was a very daunting process. However, over the years it has been streamlined to not overly burden a developer and to carefully review all development to protect Vermont’s water resources and environment.

Current Use Program

Current Use Program was developed in the late 1970’s to help farmers and land owners with their property taxes by basing the valuation of the land on its productive value versus it’s traditional highest and best use value. To qualify, a landowner must own a minimum of 25 acres of forest or farm land, and in some cases, less farmland is required. A management plan is developed by a forester and then approved by the county forester. By keeping land in Current Use, a landowner gets a substantially reduced tax burden. The landowner cannot develop land in Current Use. It can be withdrawn from the program, but doing so requires payment of  a penalty. What this program has accomplished, is the betterment of Vermont forest land through proper management, and it lessens the need for a landowner to sell off bits of their land to pay for property taxes.

Unfortunately, during these economic times, the Current Use Program has come under scrutiny as a way of generating more revenue for the state by changing the valuation and availability of Current Use. To do so would be to tamper with the very foundation that makes Vermont what it is today. There is a very strong movement underway to keep Current Use intact and by properly educating the citizens of Vermont as to  just how important this seminal program is the future of Vermont.

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Posted by Wade I. Treadway

This entry was posted on Thursday, January 7th, 2010 at 11:22 am and is filed under Market Conditions, Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.