What Happens If I Don't Pay Property Taxes in Vermont?

Property taxes are essential for funding local services in Vermont. So, if homeowners become delinquent on their taxes, the consequences can be serious. Initially, the overdue amount becomes a lien on the property. Eventually, if you don't pay your real property taxes in Vermont, the tax collector can sell the property to a new owner at a tax sale.

The tax sale process in Vermont begins with a notification, alerting you to the outstanding debt and the risk of a tax sale. Additional notices are published in local newspapers and posted in public places. The property is then auctioned to the highest bidder, who must pay the amount owed in taxes, fees, and penalties.

Importantly, Vermont law gives the owner a one-year redemption period, which means you can reclaim your property by paying the full amount owed, plus interest, within a year of the sale. If you don't redeem the property within this period, the winning bidder receives a tax deed and becomes the new owner of the home.

What Is a Tax Lien and How Does It Affect Me?

People who own real property have to pay property taxes. The government uses the money that these taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value.

If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly mortgage payment to later pay the property taxes. The servicer pays the taxes on the homeowner's behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly.

When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property act as collateral for the debt. All states have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes. So, if your property taxes are delinquent, you could eventually lose your home to a tax sale or tax foreclosure process.

What Are the Legal Consequences of Not Paying Property Taxes?

Once there is a tax lien on a property, state law establishes how property tax sales or tax foreclosures work. Typically, if a property owner is behind on their property taxes, the government will take the property and liquidate it, sell the property, or sell the tax lien, using the funds to pay off the tax bill. (Usually, the purchaser of the lien can later initiate a sale process if the taxes aren't paid.) But the exact process depends on state law.

State law defines when a property becomes subject to a tax lien, the process for selling the lien or the property at public auction (or otherwise liquidating the property to cover an unpaid tax debt), and the requirements for transferring ownership if taxes remain unpaid. State law also sets redemption periods, notice requirements, and the rights of property owners to receive any surplus funds from the sale, as decided by the U.S. Supreme Court in Tyler v. Hennepin County, 598 U.S. 631 (2023). The Tyler decision prohibits taxing authorities from keeping excess sale proceeds without providing the former owner an opportunity to recover those funds.

Local rules and county procedures govern how a tax sale or foreclosure is actually conducted. These rules sometimes establish additional requirements for the sale process, such as how and where bids are accepted, what documentation is required, and how proceeds are distributed after the sale.

When Are Property Taxes Due in Vermont?

Tax bills are generally mailed to property owners 30 days before the due date. The due date varies by municipality. If the due date falls on a weekend or a holiday, the taxes are usually due on the following business day. (Vt. Stat. tit. 32 § 4772 (2025).)

If you are late paying property taxes in Vermont, penalties and interest vary by municipality, but the most common penalty is an initial late fee ranging from 5% to 8% of the unpaid principal, often applied even one day after the due date.

How Does Vermont Handle Property Tax Non-Payment?

The tax sale process can begin if you're more than a year delinquent in taxes. (Vt. Stat. tit. 32 § 5252 (2025).) Within 15 days after the expiration of the due date for your property taxes, the town treasurer will issue a warrant in the amount of the unpaid taxes. This warrant remains in effect until the taxes on it are paid or otherwise discharged. (Vt. Stat. tit. 32 § 4793 (2025).)

The treasurer then delivers the warrant to the tax collector. (Vt. Stat. tit. 32 § 4793 (2025).) If you don't get caught up on the delinquent amounts, the tax collector will probably sell your home at a tax sale. However, it has a few different routes it might use to collect the overdue amount. (Vt. Stat. tit. 32 § 5252 (2025).)

Notice Before a Property Tax Sale in Vermont Takes Place

Before a tax sale, the collector must mail you a notice about the upcoming sale and publish and post notice of the sale.

Notice by mail. The tax collector will mail you a notice by certified mail, return receipt requested 30 days before the sale if you're a resident of the town or if you live outside the town. (Vt. Stat. tit. 32 § 5252 (2025).)

If the notice by certified mail is returned unclaimed, the collector resends the notice by first-class mail or personal service, email (if possible), and attaching it to the front door of the property. (Vt. Stat. tit. 32 § 5252 (2025).)

Notice by publication. In Vermont, the tax collector must publish notice in a newspaper for three weeks before the sale. (Vt. Stat. tit. 32 §§ 5252, 5253 (2025).)

Notice by posting. The tax collector must also post notice of the tax sale in at least one public place in the town. (Vt. Stat. tit. 32 § 5252 (2025).)

How the Tax Sale Process Works in Vermont

The tax sale consists of a public auction where the collector sells the home to the highest bidder. The highest bid must equal or exceed the amount of the outstanding taxes, costs, and fees. (Vt. Stat. tit. 32 §§ 5254, 5255 (2025).)

Not less than 24 hours before the tax sale, the property owner may request that a portion of the property, rather than the entire property, be sold to pay off the debt. The request must:

• clearly identify the portion of the property to be sold and
• must be accompanied by a certification from the District Environmental Commission and the town zoning administrative officer that the identified portion may be subdivided and meets minimum lot size requirements.

If the portion the taxpayer identifies can't be sold for the tax and costs, then the entire property may be sold. (Vt. Stat. tit. 32 § 5254 (2025).)

If no one bids an amount equal to the taxes, costs, and fees, then the city or town can purchase the home (Vt. Stat. tit. 32 § 5259 (2025).)

Can I Get My Home Back After a Vermont Tax Sale?

If you lose your home to a Vermont tax sale, you can redeem it (get it back) within one year after the sale. (Vt. Stat. tit. 32 § 5260 (2025).)

Notice of the Redemption Period

During the redemption period, the tax collector must serve the delinquent taxpayer a written notice between 90 and 120 days prior to the end of the redemption period. The notice must be sent by certified mail, return receipt requested, directed to the last known address of the delinquent taxpayer. If the notice by certified mail is returned unclaimed, notice must be provided by resending the notice by first-class mail or by personal service. The notice also has to be posted in a public place. (Vt. Stat. tit. 32 § 5260 (2025).)

How Much You'll Have to Pay to Redeem Your Vermont Home

To redeem your home, you must pay the purchase price plus interest at the rate of 1% per month from the sale date until the date you redeem. (Vt. Stat. tit. 32 § 5260 (2025).)

How to Redeem Your Vermont Home

You'll have to pay the redemption amount to the tax collector who held the sale (Vt. Stat. tit. 32 § 5260 (2025).) The tax collector will then pass the funds along to the purchaser.

The purchaser gets a deed (title) to your home if you don't redeem before the redemption period expires. (Vt. Stat. tit. 32 § 5261 (2025).)

What Happens to My Mortgage in a Tax Sale?

Because a property tax lien has priority, mortgages (and deeds of trust) get wiped out if you lose your home through a tax sale process. So, If your loan isn't escrowed and you fail to pay the property taxes like you're supposed to, the loan servicer will usually advance money to pay delinquent property taxes to prevent a tax sale from happening.

Most mortgages have a clause allowing the lender to add the amount it paid to bring the taxes current to your loan balance. You'll then have to make repayment arrangements with the servicer or potentially face a foreclosure.

What Are the Payment Plans and Tax Relief Options in Vermont?

Even though Vermont permits you to get your home back after a tax sale by redeeming it, generally, it is a good idea to take action before you fall behind in your property taxes to make them more affordable. If you fall behind on property taxes, Vermont law requires towns to offer you a written, reasonable repayment plan before proceeding with a tax sale. (Vt. Stat. tit. 32 § 5252(c) (2025).)

You could also look into whether you qualify for a property tax abatement (tax forgiveness) or exemption, or try to reduce the amount of taxes you must pay by challenging the taxable value of your home if you think it is incorrect. In addition, you might qualify for a tax credit based on a homestead declaration.

How Can I Avoid Property Tax Problems in Vermont?

To avoid property tax problems in Vermont, you need to keep track of when your payments are due. One of the simplest steps is to set reminders for key tax deadlines. Setting calendar alerts or signing up for email notifications from the tax collector can help ensure you don't miss a deadline.

Remember, if your loan is escrowed, your lender is responsible for making the payments. Even if your lender doesn't require an escrow account, you might be able to choose to have one. Homeowners with mortgages often find it easier to have their taxes (and homeowners' insurance) bundled into monthly payments, with the lender handling the bills directly. This arrangement can prevent missed payments and the resulting penalties. If you don't have an escrow account, you might want to ask your lender about setting one up.

Learn More About Property Taxes in Vermont

For more information about property taxes in Vermont, go to VtLawHelp.org. You can also learn more on the Vermont Department of Taxes website.

Talk to a foreclosure lawyer, tax lawyer, or real estate lawyer if you're facing a tax sale in Vermont and have questions about the process or need help redeeming your property.