The Vermont Statutes Online

Title 32 : Taxation and Finance

Chapter 125 : Exemptions

Subchapter 003 : NEW CONSTRUCTION OR REHABILITATION IN FLOOD-IMPACTED COMMUNITIES [REPEALED EFFECTIVE JULY 1, 2037]

• § 3870. Definitions [Repealed effective July 1, 2037]

  As used in this subchapter:

  (1) “Agency” means the Agency of Commerce and Community Development as established under 3 V.S.A. § 2402.

  (2) “Appraisal value” has the same meaning as in subdivision 3481(1)(A) of this title.

  (3) “Exemption period” has the same meaning as in subsection 3871(d) of this subchapter.

  (4) “New construction” means the building of new dwellings.

  (5) “Principal residence” means the dwelling occupied by a resident individual as the individual’s domicile during the taxable year and for a property owner, owned, or for a renter, rented under a rental agreement other than a short-term rental as defined under 18 V.S.A. § 4301(a)(14).

  (6)(A) “Qualifying improvement” means new construction or a physical change to an existing dwelling or other structure beyond normal and ordinary maintenance, painting, repairs, or replacements, provided the change:

  (i) results in new or rehabilitated dwellings that are designed to be occupied as principal residences and not as short-term rentals as defined under 18 V.S.A. § 4301(a)(14); and

  (ii) occurred through new construction or rehabilitation, or both, during the 12 months immediately preceding or immediately following submission of an exemption application under this subchapter.

  (B) “Qualifying improvement” does not mean new construction or a physical change to any portion of a mixed-use building as defined under 10 V.S.A. § 6001(28) that is not used as a principal residence.

  (7)(A) “Qualifying property” means a parcel with a structure that is:

  (i) located within one-half mile of a designated downtown district, village center, or neighborhood development area determined pursuant to 24 V.S.A. chapter 76A or a new market tax credit area determined pursuant to 26 U.S.C. § 45D, or both;

  (ii) composed of one or more dwellings designed to be occupied as principal residences, provided:

  (I) none of the dwellings shall be occupied as short-term rentals as defined under 18 V.S.A. § 4301(a)(14) before the exemption period ends; and

  (II) a structure with more than one dwelling shall only qualify if it meets the definition of mixed-income housing under 10 V.S.A. § 6001(27);

  (iii) undergoing, has undergone, or will undergo qualifying improvements;

  (iv) in compliance with all relevant permitting requirements; and

  (v) located in an area that was declared a federal disaster between July 1, 2023 and October 15, 2023 that was eligible for Individual Assistance from the Federal Emergency Management Agency or located in Addison or Franklin County.

  (B) “Qualifying property” may have a mixed use as defined under 10 V.S.A. § 6001(28).

  (C) “Qualifying property” includes property located outside a tax increment financing district established under 24 V.S.A. chapter 53, subchapter 5. By vote of the legislative body, a municipality with a tax increment financing district, or a municipality applying for a tax increment financing district, may elect to deem properties within a tax increment financing district as “qualifying property” under this subdivision (C), provided, notwithstanding 24 V.S.A. § 1896, an increase in the appraisal value of a qualifying property due to qualifying improvements shall be excluded from the total assessed valuation used to determine the district’s tax increment under 24 V.S.A. § 1896 during the exemption period.

  (i) For a municipality that elects to consider properties within an existing tax increment financing district under this subdivision (C) as “qualifying property,” the municipality shall submit a substantial change request and file an alternate financial plan to the Vermont Economic Progress Council, which shall detail the effect of this action for approval by the Council.

  (ii) For a municipality that elects to consider properties within a tax increment financing district under this subdivision (C) as “qualifying property” at the time of creation of a new district, prior to implementation of an exemption under this chapter, the municipality shall present a financial plan to the Vermont Economic Progress Council, which shall detail the impact of the action on approval by the Council.

  (8) “Rehabilitation” means extensive repair, reconstruction, or renovation of an existing dwelling or other structure, with or without demolition, new construction, or enlargement, provided the repair, reconstruction, or renovation:

  (A) is for the purpose of eliminating substandard structural, housing, or unsanitary conditions or stopping significant deterioration of the existing structure; and

  (B) equals or exceeds a total cost of 15 percent of the grand list value prior to repair, reconstruction, or renovation or $75,000.00, whichever is less.

  (9) “Taxable value” means the value of qualifying property that is taxed during the exemption period. (Added 2023, No. 181 (Adj. Sess.), § 80, eff. June 17, 2024; repealed by 2023, No. 181 (Adj. Sess.), § 82(2), eff. July 1, 2037.)