VT H0177

Transitions Vermont from an education property tax to an education income tax beginning fiscal year 2027, applying to all Vermont residents (homeowners and renters) with rates determined by locally voted school budgets

Eliminates the homestead education property tax while maintaining the nonhomestead education property tax on commercial and non-residential properties, exempting residential dwellings and the surrounding two acres from nonhomestead taxation

Creates a progressive education income tax with four brackets ranging from 3.35% to 8.75% of adjusted gross income, with rates adjusted for each school district based on per-pupil education spending relative to statewide averages

Provides a renter credit of 21% of gross rent paid as a nonrefundable credit against the education income tax, and continues municipal property tax credits for homeowners with household income up to $47,000

Expands property tax credit income sensitivity in fiscal year 2026 by raising income thresholds (from $47,000 to $60,000 for certain credits) and increasing the equalized housesite value cap from $400,000 to $1,000,000