Carly Berlin covers housing and infrastructure for Vermont Public, in partnership with VTDigger.
Katie Mandych thought she’d be in a financial position to try to purchase her first home by now. But as rent for her Waterbury apartment has continued to escalate, the 31-year-old career coach has had little opportunity to save.
That has informed Mandych’s opinion that Vermont should enact a new tax on second homes – as a way to both raise money for the state’s coffers and try to bring more housing into year-round use. In her view, higher taxes likely wouldn’t pose a hardship to people who own multiple properties.
“It makes sense for those individuals to also be paying the taxes on that home if they are in a financial position to have two homes,” Mandych said.
Most Vermonters agree. In a recent Vermont Public poll, 57% of respondents said they thought that the state should impose a new yearly tax on second homes. Twenty-eight percent of respondents disagreed, and 15% said they were unsure.
The issue of raising taxes on second homes has animated this election cycle in Vermont. Amanda Janoo, the Democratic nominee for governor, has made taxing “luxury second homes” and “commercial vacation rentals” at higher rates a central plank of her housing platform. Democratic nominee for Lt. Gov. Molly Gray has said such a tax could help pay for universal primary care for Vermonters.
Meanwhile, Republican incumbents Gov. Phil Scott and Lt. Gov. John Rodgers both say they are wary of adding any new taxes, and point to the need to rein in education costs and grow Vermont’s tax base to bring down property taxes for primary homeowners.
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A second home tax appears more popular with left-leaning voters: 70% of Democratic-leaning poll respondents said they supported a new second home tax, compared to 43% of Republican-leaning respondents and 54% of independent or minor party respondents.
Sentiments about second home taxes are fairly uniform across different regions of the state, according to the poll results.
Vermont has had a high share of vacation homes ever since the U.S. Census Bureau began counting them in the 1940s. But when it comes to taxing second homes in Vermont, defining what should qualify is itself a matter of dispute — and a question that has dogged places like New York City and Rhode Island that have rolled out similar taxes in recent years.
Estimates of how many second homes exist in the Green Mountain State vary widely. An analysis of census and municipal property tax data by the Vermont Housing Finance Agency earlier this year suggested that the state has roughly 35,500 second homes that could be fit for year-round habitation. But a preliminary analysis by the Vermont Department of Taxes of properties that could be subject to a proposed second home tax — not including seasonal camps — flagged around 70,000 properties.
Elan Hugo, a 29-year-old contractor in North Ferrisburgh who leans left but generally identifies as an independent, said he worries that a wide-ranging tax on second homes could hit Vermonters who own hunting and fishing camps. Growing up, his family had a cabin in the Northeast Kingdom; many such places are only meant for seasonal use and aren’t on the grid, he said.
“I think that there’s a lot of Vermonters who have inherited family homes, and I worry that a blanket tax like that could put burden on them,” Hugo said.
Benjamin Wheeler, 62, bought his house in Jamaica after he and his wife divorced back in Connecticut, figuring he’d use it part of the year to ski. Then he decided to move to Vermont full time, and now rents the place out as an Airbnb to help pay his bills.
He has mixed views on taxing second homes at higher rates. The part of him that’s now a Vermonter considers it a good idea – but he’s been on the other side.
“It’s not like everybody who buys a second home is incredibly rich,” Wheeler said.
Alec Nadeau of Barre Town, a manager at a bagel shop, worries that raising the tax rate too high could ultimately drive wealth away from Vermont.
“The rich people are going to be the first ones to leave, frankly, because they have the most choice,” he said.
