Vermont taxes capital gains at 8.75%. Combined with federal taxes, your effective rate on a home sale could reach 27.6%.
VT State Rate
8.75%
Top marginal rate
Federal Rate
15%
Most common long-term bracket
Combined Effective
27.6%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If Vermont is where your primary residence is located and you've lived there at least 2 of the last 5 years, you can exclude up to $250K (single) or $500K (married filing jointly) of your capital gain from both federal and state taxes.
Investment and rental properties in Vermont don't qualify for the exclusion. You'll owe 8.75% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In Vermont, homes sold in March sell for 23% more than those sold in October (-15%). Timing your sale right can offset a significant portion of your tax bill.
Capital gains tax rates on home sales in Vermont and nearby states.
| State | Rate | Tax on $150K Gain | Notes |
|---|---|---|---|
| 0% | $0 | No tax on capital gains (I&D tax repealed 2025) | |
VermontYou | 8.75% | $13,125 | Top marginal rate |
| 9% | $13,500 | 5% + 4% surtax on income > $1M | |
| 10.9% | $16,350 | Top marginal rate; NYC adds up to 3.876% |
Selling in New Hampshire instead of Vermont would save $13,125 in state tax on a $150K gain.
Vermont taxes capital gains at rates up to 8.75%, one of the higher rates in New England.
The state's rural character and limited housing stock have driven appreciation in desirable areas like Burlington and Stowe.
Vermont does not offer a preferential capital gains rate. The high rate combined with federal taxes creates substantial tax burdens.
Neighboring New Hampshire (0% tax) provides a stark contrast that influences border-area buyers.
Offering buyer concessions?
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