Seller closing costs vary significantly depending on the property value and other factors. To get a clear handle on what your closing costs may amount to here in Vermont, conferring with your land use attorney and tax accountant are advisable, especially if planning a 1031 exchange.

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Here's a thumbnail sketch of common seller closing costs:

• Real estate agency commission.

• Land use attorney fees.

• Vermont Out of State Seller Withholding Tax 2.5% of the purchase price is withheld by the purchaser and sent to the state if the seller is an out of state resident. View the Vermont Withholding Tax Return.

• An additional 15% Federal Foreign Seller Withholding tax may be applicable if the seller is not a United States Citizen, totaling, in combination with the two and a half percent state withholding tax, 17.5 percent. View the U.S. Withholding Tax Return for Dispositions by Foreign Persons of US Real Property Interests.

  • Check with your attorney or accountant to determine if the state and or federal tax withholdings can be avoided by filing for a Withholding Certificate showing less liability in advance of the closing.

  • State Withholding Certificate eligibility review is done on a case by case basis and there is no standard form. Your land use attorney can look into this for you.

  • Some state & federal withholding exemptions exist.

• Land Gains Tax, unique to Vermont, designed to discourage short run land speculation and tending to reward long-term speculators, may apply if the property has been subdivided since purchasing and owned less than six full years and property purchased as or for a second home, and would be in addition to any applicable federal & state capital gains taxes. It began in 1973.

  • It's determined at a flat rate based on the percentage of gain to basis. The tax goes from a high of 80% for gains over 200% on land held less than 4 months to a low of 5% for gains of less than 99% on land held between 5 and 6 years.

  • Land Gains Tax table.

  • Both buyer & seller are required to file Land Gains Tax Returns buyer form LGT-177 & seller LGT-178 with the Vermont Department of taxes for Vermont land owned by the seller less than six years even if no tax is due.

  • Certain exemptions exist, including the first 10 acres of land which was part of the principal residence of the seller within one year prior to sale, or which will be occupied as the principal residence of the buyer within one year after the sale.

  • If there is no house on the property the buyer can take up to two years to build and occupy a primary residence and still qualify for this exclusion.

  • Once the buyer certifies the property is to be used as a primary residence within a year, or he or she will build a primary residence within 2 years, the buyer takes on the responsibility for paying the Land Gains tax if one becomes due.

• Current Use Program Withdrawal Penalty. If some of your property is enrolled in Current Use and the purchasers opt not to continue all or some of the land's enrollment, a withdrawal penalty tax becomes due. The tax due would be 20% of the fair market value for lands enrolled 10 tax years or less and 10% for lands enrolled in 11 or more tax years. View the Request for Withdrawal From the Use Value Appraisal Program.

• Carbon monoxide & smoke detector compliance. Division of Fire Safety Certificate of Compliance. Sellers need to certify at closing that the residential or rental property they are selling has operational photoelectric-only smoke detectors on each level and in the vicinity of all the bedrooms, and operational carbon monoxide detectors installed in the vicinity of all the bedrooms. If that is not the case, the buyer has ten days to notify the seller of their absence or inoperability, and the seller then has ten days from receipt of notification to comply. View the Carbon Monoxide Detector Requirements updated April 2017 & Vermont Carbon Monoxide Statute.

• Potential rental property lead-based paint regulation compliance. If the seller has rented the property for more than one month, the seller may need to verify the Essential Maintenance Practices have been performed and a Compliance Statement has been filed with the state in advance of closing.

• Local tax and utility prorations.

• Recording Fees, for documents filed at the town office.

• Association Certificate Fee if the property is a condominium.

For more information about seller closing costs in Vermont, contact Maple Sweet Real Estate today!