Vermont Business Magazine Governor Phil Scott announced action on the following bills, passed by the General Assembly. This includes the property tax rate "yield bill." The average increase in property taxes this year is 1.1%. Last year's increase was 13.8%. While costs have come down this year, the Legislature used $77.2 million in surplus funds from the General Fund as a one-time fix for FY2026, which begins this July 1. Before the session began, the projected average property tax increase was 5.9%.
On May 19, Governor Scott signed bills of the following titles:
- H.137, An act relating to the regulation of insurance products and services
- H.491, An act relating to setting the homestead property tax yields and the nonhomestead property tax rate
When signing H.491, Governor Scott issued the following statement:
“After last year’s significant property tax increase, we knew it was important to provide Vermonters tax relief. But I want to be clear, buying down rates year after year isn’t good fiscal management and we should only view this as a bridge to the real education transformation our system needs. Before this session adjourns, it’s critical we work together to deliver an education bill that sets us on a path to a better more sustainable funding system, a more efficient and effective governance structure, and a commitment to doing the education quality work needed to make sure all students have access to educational opportunities, at a price Vermonters can afford.”
To view a complete list of action on bills passed during the 2025 legislative session, click here.
Joint Fiscal Office
May 1, 2025
H.491 – An act relating to setting the homestead property tax yields and the nonhomestead property tax rate
As recommended by the Senate Committee on Finance
Bill Summary
This bill sets the property dollar and income dollar equivalent yields for the purpose of setting homestead tax rates and property tax credits. It also sets the nonhomestead property tax rate.
Fiscal Impact
This bill sets the property dollar equivalent yield, income dollar equivalent yield, and nonhomestead property tax rate for fiscal year 2026. The Joint Fiscal Office (JFO) estimates that these yields and rates would correspond to an average increase of approximately 1.1% for homestead property tax bills, income education tax bills, and nonhomestead property tax bills.
Background and Details
Section 1
Section 1 sets the property dollar equivalent yield at $8,596, the income dollar equivalent yield at $12,172, and the nonhomestead property tax rate at $1.703 for fiscal year 2026.
JFO estimates that these yields and rates will correspond with an average increase of approximately 1.1% for homestead property tax bills, income education tax bills, and nonhomestead property tax bills. These yields and rates are set at a level estimated to be sufficient to fully fund the Education Fund in fiscal year 2026.
Section 2
Section 2 includes a technical correction for the purpose of calculating the property tax credit in accordance with the statewide adjustment changes made in Act 183 of 2024.
The full fiscal note history is available on the fiscal tab of the bill page on the General Assembly website and can be pulled up through a bill number search on the JFO page.
The corresponding Education Fund Outlook can also be found on JFO’s website at the following link: H.491 EF Outlook.
The Joint Fiscal Office (JFO) is a nonpartisan legislative office dedicated to producing unbiased fiscal analysis – this fiscal note is meant to provide information for legislative consideration, not to provide policy recommendations.
Source: Governor. 5.19,2025. 109 State Street | The Pavilion | Montpelier, VT 05609-0101 | www.vermont.gov
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