Sale Type: | Tax Sale (Deed Issued if Not Redeemed) |
Interest Rate: | 1% per month if redeemed (paid by the owner to the buyer) |
Bid Method: | Public auction held by the town |
1 year from the sale | |
Sale Date(s): | Set by each town |
State Statute(s): | 32 V.S.A. Chapter 133 (§§ 5252 to 5263) |
No | |
State Website: |
Vermont does not issue tax lien certificates. Instead, a town sells delinquent property at a public tax sale, and the owner has one year to redeem it. This guide explains how Vermont tax sales work, so you know what to check before you pursue tax-delinquent property in the state.
When a Vermont Town Can Hold a Tax Sale
The town’s tax collector can start the process only when a taxpayer owes at least $1,500 and has been delinquent for more than one year (32 V.S.A. § 5252). Before the sale process begins, the town must also offer the owner a written, reasonable repayment plan. If the owner declines, does not respond within 30 days, or misses a payment under the plan, the town can move forward.
How the Tax Sale Works
The collector files the warrant and levy with the town clerk, then sells the property at public auction to cover the taxes, costs and fees. Before the sale, the town must:
Advertise the sale in a local newspaper three weeks in a row, with the last notice at least 10 days before the sale.
Send the owner written notice by certified mail at least 30 days before the sale.
Notify each mortgage holder and lienholder of record at least 30 days before the sale.
Post notice of the sale in a public place in the town.
Other points to know:
The owner may ask in writing, at least 24 hours before the sale, to sell only a portion of the property, if that portion can legally be subdivided (§ 5254).
If no bid covers the taxes and costs, the town may buy the property itself (§ 5259).
Within 30 days of the sale, the collector files a report of the sale with the town clerk (§ 5255).
Sale dates and terms vary by town, so contact the town tax collector for details.
The One-Year Redemption Period
After the sale, the owner, a lienholder or a mortgagee has one year from the day of sale to redeem the property. To redeem, they pay the sale price plus interest at 1 percent per month, or fraction of a month, from the day of sale (§ 5260). The collector passes that money to the buyer.
If the property is redeemed, the buyer is repaid and no deed is issued. The collector must also send the owner a warning notice 90 to 120 days before the redemption period ends.
If the Property Is Not Redeemed
When the year passes without redemption, the collector delivers a deed to the buyer. That deed conveys title against the former owner and anyone claiming under the owner (§ 5261). Within 30 days after the redemption period ends, the collector files a list of the unredeemed properties with the town clerk (§ 5262).
Vermont also limits late challenges. An action to recover land cannot be brought against a buyer who holds a recorded tax collector’s deed, has been in open and continuous possession and has paid the taxes, unless it is filed within one year (§ 5263).
What This Means for Investors
A tax lien is a claim on a debt that earns interest. A tax deedA legal document that transfers property ownership to the government or an investor after the owner fails to pay property taxes for an extended period. transfers the property itself. Vermont’s tax sale can lead to either outcome. If the owner redeems, the buyer receives the sale price back with 1 percent per month interest. If the owner does not redeem, the buyer receives a deed to the property.
You will not know which outcome you will get when you bid. Returns are not fixed. Price, condition and title vary by property, and all investing involves risk.
What Investors Should Check
Before you bid at a Vermont tax sale, do your own due diligenceThe research and investigation process an investor conducts before purchasing a tax lien or tax deed to evaluate the property and assess risk.:
Ask the town tax collector about sale dates, registration and payment terms.
Run a full title searchAn examination of public records to verify a property's legal ownership and identify any liens, encumbrances, or other claims that may affect the title. and check for mortgages and other liens, since lienholders can also redeem.
Confirm the town sent the required notices before the sale.
Calendar the last day of the redemption period for any property you buy.
Review zoning, access and the condition of the property.
Compare the rules in your own state using the tax lien states vs. tax deed states map.
This page is for education only and is not legal or financial advice. Statutes change, so confirm the details with the town and a qualified attorney before you invest.
Want to learn how tax liens and tax deeds work in the states that sell them? Register for a Free Workshop with Tax Lien Wealth Builders and get coached by our expert team.