Code of Vermont Rules › Agency 10 - AGENCY OF ADMINISTRATION › Sub-Agency 060 - DEPARTMENT OF TAXES › Chapter 037 - PROPERTY TAX REBATE REGULATION › Section 10 060 037 - PROPERTY TAX REBATE REGULATION

Current through June, 2024
1.5961(7)-1
				(Effective 11/20/95) Rent constituting property taxes
(a) Purpose: The purpose of this regulation
				is to clarify how landlords are to allocate property taxes to rental units and
				how renters may dispute an allocation made by a landlord.
(b) Relevant statute:
32 V.S.A. § 5961(7) provides in relevant part:
"Rent constituting property taxes" means for any homestead
				  and for any taxable year, that portion of the gross rent actually paid during
				  the taxable year by the individual or other members of the household solely for
				  the right of occupancy of the homestead during the taxable year, which equals
				  the property tax allocable to the claimant's rental unit for the period rented
				  by the claimant.
(c) Amount
				certified The amount certified by landlords shall be the lesser of property tax
				allocable to the rental unit and the rent paid solely for the right of
				occupancy. In instances where the property tax allocable to the unit exceeds
				the rent paid for right of occupancy, such as may be the case with subsidized
				housing or rents significantly below market or when the rent has not been paid,
				special rules apply. See paragraph, (i) below.
(d) Property tax allocable to the claimant's
				rental unit for the period rented by the claimant To determine the property tax
				allocable to a rental unit, except nursing homes, community care facilities and
				like facilities and boarding houses, any of the following allocation methods
				may- be used by the landlord. The same method of allocation must be used for
				every unit in the rental building and the landlord shall indicate on the
				certificate the method used to allocate property tax to rent.
(e) Allocation methods Property tax must be
				allocated to rental units using one of the following methods:
(1) Divide the total property tax assessed on
				the rental property by the number of rooms available for residential use in the
				rental building and multiply that result by the number of rooms occupied by the
				claimant and multiply by the percentage of the year that the claimant occupied
				the rooms as a homestead and paid rent;
(2) Determine the percentage of square
				footage each unit in the rental building occupies and multiply that percentage
				by the total property tax assessed on the rental building and multiply that
				result by the percentage of the year that the claimant occupied the unit as a
				homestead and paid rent;
(3)
				Determine the percentage of rent charged for the claimant's unit relative to
				the total rental value of the rental building for a twelve month period and
				multiply that result by the total tax assessed on the rental building and
				multiply that by the percentage of the year that the claimant occupied the unit
				as a homestead and paid rent;
(4)
				If a separate appraisal of the rental unit has been done by the town in which
				the rental unit is located, multiply the separate value of the unit occupied by
				the claimant by the tax rate multiplied by the percentage of the year that the
				claimant occupied the unit as a homestead and paid rent.
(f) Nursing homes. community care facilities
				and like facilities and boarding houses Rent allocable to property tax in the
				case of nursing homes, community care and like facilities and with respect to
				boarding houses shall be determined by dividing the entire property tax on the
				structure or structures and two acres (but excluding facilities such as
				swimming pools) by the number of bedrooms in the structure or structures. If
				the claimant occupies a shared room the result shall be divided by the number
				of persons sharing the room.
(g)
				Condominiums and other cluster housing In determining property tax allocable to
				condominiums and other cluster housing, whether detached or having common
				walls, the total acres commonly owned shall be divided by the number of housing
				units. This result up to two acres shall be considered part of each housing
				unit.
(h) Mobile home lots The
				property tax allocable to a mobile home lot may be determined in the following
				ways:
(1) tax on the total acreage of the
				entire mobile home park property necessary for use as a mobile home park may be
				divided by the number of lots available for occupancy;
(2) the ratio of square footage of the lot to
				the total square footage of the park property may be multiplied by the total
				taxes due on the park property; or
(3) the ratio of the rent paid for the lot to
				the rent chargeable on all of the lots may be multiplied by the taxes due on
				the park property.
(i)
				Solely for the right of occupancy In instances where it is necessary to
				determine the rent paid solely for the right of occupancy, the cost of certain
				items included in the rental price, such as heat, electricity, furnishings,
				personal care or other services, must be excluded. One method of determining
				the amount to be excluded is to add the actual cost of such items for the
				rental building and divide by the number of units. The allocation method
				described above in (e)(1) o (e)(2) may also be used. Operators of nursing homes
				and community care homes who cannot determine specific excludable charges must
				exclude 75% of the total charge. Operators of boarding houses who cannot
				determine specific excludable charges must exclude, 50% of the total charge.
(j) Appeals
If a claimant disagrees with the allocation made by his or
				  her landlord and files a claim based on a different allocation of property tax
				  to the rental unit, and the Department reduces the claim based on the
				  landlord's allocation, the claimant may appeal the reduction in the same manner
				  as provided in
				  32 V.S.A.
				  §
												5883 and § 5885 with respect to
				  notices of deficiency or assessment of penalty.
In a hearing before the commissioner, the burden shall be on
				  the claimant to show that the allocation used by his or her landlord is not one
				  of the methods prescribed in paragraph (e). If any of the methods described in
				  this regulation is used by the landlord, it will be accepted. If the
				  commissioner determines that the landlord did not use one of the prescribed
				  allocation methods, then the claimants, allocation and the allocation of all
				  the tenants in the building shall be changed to reflect one of those
				  methods.
(k) Examples
(1) A claimant occupies a three room
				apartment in a three unit apartment building. He pays $ 325 a month for rent.
				One of the other apartments has five rooms; the third apartment is a two room
				efficiency. The claimant's apartment occupies 30% of the square footage of the
				building. The apartment is unfurnished and claimant pays his own utilities. The
				property tax on the building is $ 2,400 a year. The landlord may determine rent
				constituting property tax as follows:
(A) $
				2,400
10 (no. of rooms in bldg.) = $ 240 x 3 = $ 720
-or-
(B)
				$ 2,400 x 30% = $ 800
-or-
(C)
				$ 1,025 (total monthly rent for bldgc.)
$ 325 (claimant's monthly rent) = 32% x $ 2,400 = $
				  768
(2) The same
				facts as (a) except the claimant has only occupied the apartment since July 1.
				After calculating "rent constituting property tax" by one of the above methods,
				the landlord multiplies the result by 50%, the percentage of the year the
				claimant has occupied the apartment.
(3) The same facts as (a) except that the
				claimant's rent included heat. Heat for the building costs $ 900 a year. The
				landlord would calculate "rent constituting property tax'' using any of the
				above methods because even with the cost of heat excluded, it is apparent that
				the rent claimant pays exceeds the property tax allocable to the
				apartment.
(4) The claimant's four
				room subsidized apartment occupies 25% of the square footage of her apartment
				building. Her portion of the rent, $ 150, includes heat and electricity. The
				property taxes on the house are $ 6000 a year. The annual heating and
				electricity costs for the entire house are $ 2000. Because in these
				circumstances the claimant's rent paid solely for the right of occupancy may be
				less than the property tax on her unit, the landlord must exclude the value of
				the heat and electricity from the claimant's rent payment. The landlord can do
				this based on the number of rooms in the apartment in relation to the number of
				rooms in the entire house or the square footage of the apartment in relation to
				the total square footage of the house.
Allocating 25% of the cost of the heat and electricity to
				  claimant's apartment leaves $ 1,300 as rent paid solely for the right of
				  occupancy (gross rent of $ 1,800 less $ 500, the value of her heat and
				  electricity). The rent less heat and electricity is less than "rent
				  constituting property taxes" determined under the methods above ($ 6000 x 25% =
				  $ 1,500):
rent per year
$ 1,800
property tax on bldg.
$ 6,000
value of heat
claimant's portion of
and electricity
500
tax based on area
25%
rent solely for
property tax allocated
rt. of occupancy
$ 1,300
to unit
$ 1,500
Therefore, "rent constituting property tax' is limited to the
				  lesser of these, or $ 1,300.
(l) A landlord's failure to certify an amount
				of rent constituting property taxes will not disqualify a claimant from the
				rebate program. If unable to obtain a certificate from a landlord, a claimant
				should mail the following items to the Department by the filing deadline: a
				landlord certificate (Form 103-LC) completed through line 1; a Homeowner or
				Renter Rebate Claim (Form 103-PR) completed through line I of the calculation;
				receipts or cancelled checks to substantiate rent paid; and a note explaining
				that a certificate was not received from the landlord and giving the landlord's
				name, address and telephone number.