Property Tax rebates(prebates) and how it will affect sellers

[dearon]

If you are one of the lucky ones and are expecting a tax rebate check from the State of Vermont, be aware it will not be coming to your mailbox.  The check will insted go to the town.  Another twist to this little "new law" is if you are selling a property your rebate check is deducted from your total tax and then the taxes are prorated.  Therefore you are sharing your prebate/rebate with the buyer of your property!  To add insult to injury you will be paying a federal tax next year on this rebate as income.   Your tax rebate is based on your income, now not even that will remain private any more.  An astute person can certainly figure that out with a few calculations!
This rebate belongs to the property owner, this is what the law states.  When you start sharing your income (tax rebate) with a buyer this is unconstitutional. 
I've tried unsuccessfully to reach, by email, our representative. There was no response to my email.
It is time to vote these "representatives" out of office and get someone in there that will be working for the people not for the government. 

Remember the Estate tax?  This was put in place to pay for the war bonds (world war 1).  Hummm....

[Carolyn Branagan]

I   have  not  heard these concerns about the transfer difficulties until now. My  understanding  was  that  these  agreements were  worked  out at the time of sale.  I'll talk to the  Tax  Department  as  soon as I can and  will get back  to  you. There  is  no  way  to get  in touch with  you  from this  message ,  can you  please  call me and  let  me know how to get  in touch with you?  I certainly would have contacted  you  if I  had  gotten a  message  of  any  kind.   527-7694

from,  Rep.  Carolyn branagan
Franklin-1, Fairfax/Georgia
Vermont House of Representatives   

[dearon]

You were emailed a month ago and the email did not bounce back.   I will call you. "These agreements", meaning the tax rebate sharing?     If you could call the Vermont Association of realtors attorney, Tom Heilmann,  has given seminars on this new legislation and what it is doing to the sellers of homested property.  We are taking away monies from hardworking homeowners.  The average rebate is $1200., when prorated at certain times of the year could mean nearly the entire rebate could be shared with the buyer.  The mandates and new laws  that the legislators have come up with has again dug into the pockets of the hard working Vermonters. The rebate should be sent to the property owners and not the town, it belongs to the owner of the property. The property owner could earn a little interest on their money before paying the already too high property taxes.
 What the legislators have created is a mess.

[Carolyn Branagan]

I'll get in touch with him on Monday, and I'll also call the Tax  Department. 

I did not receive your message and would have contacted you if I had.

By agreements, I mean real estate tax proration, oil in the fuel tank, rent proration (if it is rental property) etc, these  are  whatever outstanding details needed to make a  property transaction happen. Since the prebate/rebate hasto do with the   taxpayers income, I would think that it should go entirely to the taxpayer who applied, provided  he owned the property on April first. But again, this is the kind of thing  I would think would be discussed at closing.

This change was made at the request of the Town Clerk's Association and with the support of the Vt. League of Cities and Towns. They were telling us that too many people were not using this money to pay their property taxes, using it instead for other things. It was not understood that this money was intended for reduction of the property tax  bill. This  is not money that has been paid in by the taxpayer like a withholding. This is money raised by all taxpayers in Vermont through their taxes, and given out to reduce the liability of taxpayers  who are under a certain income level.

from,  Carolyn

Rep.  Carolyn Branagan
Franklin-1, Fairfax/Georgia
Vermont House of Representatives

[dearon]

Again, The tax rebate should not even come into discussion on being prorated, at closing or otherwise. It belongs to the property owner.

The tax rebate is income sensitive and does belongs to the property owner, not the towns, regardless of where the monies come from.  You and the legislators out there are working on behalf of those who voted for you.  The town clerks or leagues of cities and town did not vote,  they are branches of our government.  This explaination sounds like an excuse or a "pass the buck" reason for the vote.  Regardless of what is done with the rebate it belongs to the property owner.  Earned income credit (on your federal tax forms) is also not a withholding yet many people have the benefit of this rebate.  Heaven forbid our  legislators get their hands on this.

Yes some people cannot manage their money properly but it does not mean the government should control their assets.

[dearon]

Thank you Carolyn for returning my phone call today and starting the work on find out how to fix the problem.
I was also pleased to hear you did not vote for this bill. It will mean alot to the voters out there come election time.

[Carolyn Branagan]

I will try to find a solution for this problem for income sensitivity users who are attempting to sell their properties. 

In the meantime, the reason some of your earlier communications did not reach me has to do with the statehouse 'spam catcher'  working a little too well. I've had the statehouse computer whiz kids reset the sensors (or whatever the gizmo is called!) and I should be able to get messages from you at this pount. 

If any one else doesn't seem to get response, just call and leave a message at home. 527-7694 That usually works. I heard from Gary that he had not recieved some messages, so it's not just  me.   

Rep.  Carolyn Branagan
Franklin-1, Fairfax/Georgia
Vermont House of Representatives

[Carolyn Branagan]

Deanne,

Here's the section of S.77 that relates to the issue regarding payment of property tax adjustment amounts when property is  changing hands. As you and I discussed this is only an issue for this year. The Governor is expected to sign S.77 into law this  morning.Thanks again for bringing this up. Contact me anytime you have further questions.  527-7694.

Rep. Carolyn Branagan
Franklin-1, Fairfax/Georgia
Vermont House of Representatives

Here's section 7 of the bill:


  Sec. 7.  CASH PAYMENT OF PROPERTY TAX ADJUSTMENTS FOR
 2007 REAL ESTATE CLOSINGS

For 2007 only, notwithstanding any other provision of law, for a residence transferred after March 31 and before June 21, 2007, if the transferor notifies the commissioner of taxes of the transfer, in writing, no later than 4:30 p.m. on June 20, 2007, and includes with the notice a copy of the property transfer tax return and proof of payment of the property transfer tax, the transferor’s Social Security number, the property’s school parcel account number, and any additional information which the commissioner may request the commissioner shall not notify the municipality of a property tax adjustment amount for the property, and the commissioner shall pay the property tax adjustment amount to the transferor by July 15, 2007.

Sec. 8.  EFFECTIVE DATE

     Sec. 7 of this act shall take effect upon passage and apply to property transfers after March 31 and before June 21, 2007.