Housing Bill & Income Tax Surcharge (H.829) - March 27, 2024

The House Ways & Means Committee reviewed H.829 on Wednesday. This bill as originally proposed by Representative Stevens to restore,  enhance, and supplement elements of Vermont’s pandemic-era housing policy  that ceased with the termination of federal pandemic aid by implementing  permanent upstream eviction protections and other rental housing policies to  preserve housing stability for both tenants and property owners, including by  creating a rental registry; allocating resources for eviction diversion;  modernizing policies on just cause evictions, rent increases, and security deposits; and creating programs for property owners to access funding to remediate damages created during recent tenancies.

The Chairwoman Kornheiser presented an amendment to the bill which, as noted in a VTDigger article, “would raise funds by creating a new top personal income margin tax bracket for Vermonters who earn more than $500,00 in a year at a rate of 11.75% and increasing the property transfer tax to 3.25% for property valued over $600,000.”

Kornheiser summarized the proposed changes to the bill as follows:

First, essentially for “mathematical convenience” the amendment the Committee previously passed, removed the percentages as a way of dividing up a trust fund. But they are in fact, a vital part of our commitment between purchases and investments in relationship to property purchases and investment in housing and conservation.  So, between the time when the Committee moved the original bill along and now, the Kornheiser was able to work with staff and figure out a way to make those percentages work to be mathematically consistent. N

Ted Barnett (Fiscal Analyst, Joint Fiscal Office) made a presentation to the Committee after a review of the bill to show the Committee how the percentages proposed in the amendment would work mathematically.

The next section of the amendment restores the clean water funding, which was accidentally cut from the bill.

The next section of the amendment refers to the property tax transfer which the Kornheiser noted has been talked about in Committee for a long time, never fully discussed the $600K threshold.  As noted by the Chair, the world is different these days and property values have risen considerably.  The amendment recommends moving the threshold to $750K.

NOTE: This is a good move because the median home prices in Chittenden County and other various municipalities around the state are approaching the $600K number which means that middle-class Vermonters would be hit by this surcharge.

Representative Taylor, who chaired the mobile home task force this summer, also suggested an amendment to make sure that the manufactured homes are included in property tax transfer at the lowest level.

Gus Selig (Executive Director, Vermont Housing & Conservation Board) testified in support of the bill and said that Property Transfer Tax had not been adjusted since 1988 and the change is very much appreciated. He described the long-term approach taken in the bill as “excellent.”  The demand for housing is great and funding is sorely needed. Funding awarded to VHCB will enable them to make loans and grants to nonprofit organizations, municipalities, and state agencies that work on conservation projects and for the acquisition, rehabilitation, and construction of affordable housing by nonprofit housing organizations.

Peter Gregory (Executive Director, Two-Rivers Ottauquechee Regional Commission) was also very supportive of the amendments and said that it would help with flood recovery in his area. He noted that the funding formula appeared equitable throughout Vermont and that the concept, as presented, was good. He said that the Commission initiated a study, as they had 10 years ago, to study the programs and funding they receive to ensure that the programs are effective and run efficiently.


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