It was Jeremy Dodge’s inability to pay nearly $18,000 in back taxes that ultimately cost him the deed to his 16-acre homestead in East Montpelier. But how could man who failed to crack the five-figure threshold in annual income accumulate such as massive property-tax bill?
Vermont’s progressive tax code reduces the obligations of lower-income homeowners by limiting their burden to a percentage of their annual income. Residents’ ability to avail themselves of “income sensitivity,” however, requires them file a “homestead declaration” with the Vermont Department of Taxes, something Dodge apparently failed to do.
Between 2010 and 2012, according to state records, no one filed a homestead declaration on the Dodge property. Dodge, who says he never made more than $10,000 in each of those years, was charged full freight on property taxes as a result. His bill for tax year 2012 – the property was at that point appraised at $233,700 – came in at $4,597.11.
Income sensitivity would have cut the bill to a fraction of that amount – the law limits property-tax bills of low-income homeowners’ to about 5 percent of annual income. According to East Montpelier town records, Dodge assumed ownership of the property deed in 2009, after which the delinquent taxes began piling up. Continue reading