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Vermont Purchase or Sale of Real Property - Land or Lot - Questionnaire

State:
Multi-State
Control #:
US-Q1036
Format:
Word; 
Rich Text
Instant download

Description

This form addresses important considerations that may effect the legal rights and obligations of the parties in a lot or land sale matter. This questionnaire enables those seeking legal help to effectively identify and prepare their issues and problems. Thorough advance preparation enhances the attorney’s case evaluation and can significantly reduce costs associated with case preparation.



This questionnaire may also be used by an attorney as an important information gathering and issue identification tool when forming an attorney-client relationship with a new client. This form helps ensure thorough case preparation and effective evaluation of a new client’s needs. It may be used by an attorney or new client to save on attorney fees related to initial interviews.


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FAQ

A straightforward sale of land or property (whether for development or not) would normally lead to a Capital Gains Tax (CGT) charge. The gain is calculated as the sale price, less the purchase cost and any qualifying improvement expenditure, and less any incidental costs of purchase or sale.

A buyer of Vermont land held for less than six years is required to withhold 10% of the consideration attributable to land. At the time of transfer, withholding must be submitted to the Vermont Department of Taxes.

Who is Required to File a Land Gains Tax Return? Anyone who purchases Vermont property that was held by the transferor (seller) for less than six years is required to file even if no tax is due.

A buyer of Vermont land held for less than six years is required to withhold 10% of the consideration attributable to land. At the time of transfer, withholding must be submitted to the Vermont Department of Taxes.

Before you buy any property, you should plan to have an experienced Vermont attorney conduct an Act 250 review and a review of other state permitting files, such as state wastewater permits, as well as a title search in the land records.

The homebuyer pays the tax When a home purchase closes, the home buyer is required to pay, among other closing costs, the Vermont Property Transfer Tax. The buyer is taxed is at a rate of 0.5% of the first $100,000 of the home's value and 1.45% of the remaining portion of the value.

The transferee (buyer) and transferor (seller) simultaneously file the LGT-177 and the LGT-178 and the transferor (seller) pays the full amount of land gains tax due as shown on the LGT-178.

A: CGT is a tax that is always paid by the seller of a capital asset at a rate of six percent of its gross selling price, zonal value (BIR), or assessed value (provincial/city assessor), whichever is higher.

Use Value Appraisal, or Current Use as it is commonly known, is a property tax incentive available to owners of agricultural and forestry land in Vermont. Eligible landowners can enroll in the program to have their land appraised at its Current Use (farming or forestry) value rather than fair market value.

Capital Gains Tax on Sale of Land In the case of STCG, the profits generated in the process of selling land is included in the taxable income of the owner and he/she has to pay taxes depending on the income tax slab they fall in for that particular financial year. For LTCG, the current tax rate is 20%.

More info

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Vermont Purchase or Sale of Real Property - Land or Lot - Questionnaire