As I noted in my last blog, Buying Property in Vermont, some states do not require or use an attorney, but Vermont does. That blog post discussed why buyers should retain the advice of an attorney. This blog discusses the point of view of the seller, and the need for an attorney.
Those selling homes in Vermont need an attorney to research and prepare the new warrantee deed and the property tax return form, and if necessary, to provide assistance if and when there are any title issues that need to be cleared up prior to the sale of a property. A problem with a title, such as a lien, can stall a real estate sale indefinitely, and no one wants that to happen!
Sellers should be aware that if they are nonresidents there may be a withholding fee of 2.5%, unless a withholding certificate is issued. You can obtain a withholding certificate by calling the Vermont Tax Department at 802-828-2777. You can also read more about Vermont Real Estate Taxes in the 2011 Special Report on Vermont Real Estate Taxes.
If you are selling land and you have not owned it for more than six years, there is a land gains tax, and it is sizeable in the first year of ownership. The rate reduces every year until six years go by, at which point there is no land gains tax and you owe zero.
There are also ACT 250 regulations if a property has been subdivided. Documentation must be provided to buyers in advance of the closing.
With so many details to consider, I, as a realtor, often reflect on the wise advice my father gave years ago: “Why would you ever purchase or sell something as important as real estate without good legal advice?” So, my recommendation is find a good attorney who you can trust, and let him or her manage the legalities of your real estate transaction. Contact Lea or call 802.858.9193 with any questions about buying or selling real estate in Vermont.