Vermonters care deeply about community and equity. The debate over a second home tax has become a battle over state identity: is Vermont still Vermont if we discourage second-home ownership?

There seems to be a prevailing notion that the bulk of second homes belong to wealthy out-of-staters, and that they drive up housing prices and push Vermonters out of their own communities. The emotional appeal of the tax is to curb that trend and lower costs for full time residents. But this framing overlooks the role second homes play in our economy. Tourism accounts for roughly 9% of Vermont's GDP, and second-home owners are part of that story. A tax that discourages them risks driving away valuable out-of-state dollars that contribute towards our economy.

The law also limits what is possible. The U.S. Supreme Court holds that states cannot impose taxes that discriminate against out-of-state interests, including property taxes. Vermont therefore likely cannot tax only out-of-state owners exclusively. This naturally forces legislators to push this tax on ALL non-primary residences, including the camps and cottages Vermont families have held for generations. This defeats the emotional purpose of this tax.

According to the Vermont Housing Finance Agency, 48% of seasonal homes are owned by out-of-staters and 35% by Vermonters who live in other towns. A tax built to target "wealthy out-of-staters" would reach many Vermont families too.

If we want our tourism sector to contribute more, other forms of taxes can meet the moment. The state's meals and rooms taxes and voter-approved local option taxes already capture spending by visitors, and they can be adjusted without the legal and fairness problems of a second home tax.

Vermont cannot reliably lean on a Second Home tax to effectively target the emotional “who” we desire to tax. And, if we can’t do that, the policy falls flat.

In Service,

Dan Kronlund
South Burlington