Explainer: Why is the homestead tax rate higher than the non-homestead rate this year?

By Shawn Cunningham
© 2026 Telegraph Publishing LLC

Readers have asked why the education property tax rate for residents in the Green Mountain Unified School District is higher than the rate for non-residents and businesses. It’s usually the other way around.

The answer lies in the Byzantine calculations the state uses to fund education spending. If you are prone to vertigo, you might want to sit down before continuing.

Each year, the Vermont Legislature passes “the yield bill,” which puts forward the numbers used to set the tax rates. The yield is a mathematical benchmark calculated as how much a base tax rate of $1/$100 of assessed value would raise per student. This is all put together by legislators and economists and it’s different every year.

This year, the yield is $9,401. Last year it was $9,893; in 2024 it was $10,277 and 2023 it was $15,221. Spending above the yield increases the tax rate from that $1 base. The rate is arrived at by dividing the per pupil spending of each district by $9,401. In the case of GMUSD, per pupil spending is $16,060 (voted on in March and then again in May) divided by the yield of $9,401 to get the GM district rate of $1.7083.

Also spelled out in the yield bill is the non-homestead tax rate that applies to second-homes and businesses and is the same for every town and city in Vermont. This year that rate is $1.643 per $100 of assessed value. So the GM district rate — based on spending — comes out about 6.5 cents lower than the non-homestead rate.

But wait there’s more. Since each town currently has its own listers or assessors working on their own timetables to conduct assessments, the state has ways of “equalizing assessments” across towns in an attempt at fairness for all homeowners. The Common Level of Assessment is a number that represents how close each town’s assessments are to current values. If your town’s assessments are in line with current values, that number is 1. If your town is under-assessed, the CLA will be below 1 and if your town’s values are higher, the number will be above 1.

It used to be that your school district’s rate for homes would be divided by the CLA and that would be the homestead rate. But right now, the system is so out of whack — thanks in large part to the Covid real estate boom and double digit health insurance costs for those on the schools payroll —  the state is throwing some surplus money into the mix and calling it the “statewide adjustment” or SA.  This is yet another number that softens the effect of the CLA. (See chart below.) Still, if your town has not been reappraised since Covid, chances are the tax rate will still hit pretty hard.

So, while Chester’s Homestead Education tax is $2.0107, Andover – which has been more recently appraised to higher values – is $1.0817. Cavendish, which has gone without an appraisal for longer, gets a Homestead rate of $2,1817 because it has lower assessed values. Chester has contracted for a fresh reappraisal to begin in 2027, ending in one to two years. But even with a fresh appraisal, it will take a little while for taxpayers to feel a full measure of relief since the CLA is calculated on a three-year running average.

Chester’s last re-appraisal was completed in early 2020, just before the Covid boom. The previous re-appraisal was in 2008. Act 170, which is mainly known for mandating voluntary school merger talks, also sets up regional re-appraisal districts that are to begin in 2031. Under that law, all properties must be re-appraised every six years.

To see all Vermont town tax rates click here: Vermont education tax rates by town