Orland Campbell came before the Manchester Select Board last week with a request to waive the late filing fees he received from the town regarding his homestead application. Campbell said that confusions in filing dates led him to accrue a "sizable penalty," specifically $860.02, in his tax bill from the town.
"It isn't that I didn't pay my taxes," Campbell said, "I only filed an application late."
The state of Vermont recently changed their requirements for when one must file a homestead declaration. Beginning January 1, 2013, forms must be filled out annually, and filed by April 15. This was formerly the law until 2011, when it was changed so that a homestead owner only needed to file once, and it would remain in homestead status until the property was sold or changed to nonresidential. It then returned back to an annual filing in 2013. "In my opinion, there was not a whole lot of advertising that they changed," Campbell said.
According to the state, a homestead is one of two classifications of properties, defined as "the principal dwelling and parcel of land surrounding the dwelling, owned and occupied by the resident as the person's domicile"; the other is known as a nonresidential property.
A nonresidential property is one that is either used for commercial purposes or used as a second home, camp, vacation, or summer cottage.
The distinction between the two types of properties need to be made due to the difference in education property tax rates.
Those who do not file by April 15, as in the case of Campbell, can still meet the late-filing deadline of October 15, but at that point late filing penalties will apply.
The late filing fee either amounts to three or eight percent of the education property tax on the property; in Manchester, the fee is eight percent because the rate on a homestead in Manchester is higher than a nonresidential property.
In other towns, where the penalty would be three percent, their nonresidential rates are lower.
"The fee is necessary because the rates do not come out until July, and you have to file in April," said Town Manager John O'Keefe. "If they didn't have the fee... you could wait until July, see which was cheaper, and file that way."
"People used to cheat the system," Campbell said, "so they fixed it... but they didn't do so intelligently."
The fees that Campbell were billed for are solely collected by the town; they are then sent to the state where they are dispersed to schools throughout the state. Also, this means that any appeals must be made to the town as a hardship appeal, not the state.
Campbell explained that before he went to the select board, he spoke with members of both the Ways and Means Commission as well as the Commissioner of Taxes; when he did not find a resolution he went before Manchester's selectboard.
"That's the nice thing about this state," he said. "You can go to the board, and if they decide they don't want to waive it, at least they let you talk. I'm not going to nag them, I know what they have to do, but it is nice to be able to bring it to them."
Campbell, a former lawyer as well as member of the Vermont legislature and local selectboards, understands the process of appealing the fees and plans on returning to the next selectboard in August to see if they have come to any decision.
Campbell also hopes to possibly fix the issue on a legislative level.
The date for filing a homestead application remains at April 15, but the tax adjustment deadline was moved to October 15.
For more information on filing for a homestead, go to www.secure.vermont.gov/hd