A proposal to increase taxes on second homes and vacation properties—previously introduced and stalled earlier in the 2026 legislative session—resurfaced this week in Senate Finance Committee discussions, raising questions about both process and policy direction in Vermont’s ongoing education funding debate.

At issue is whether lawmakers are attempting to advance tax provisions that failed to move on their own by attaching them to other active legislation, a maneuver often referred to as “Christmas tree” legislating.

Two Earlier Bills Targeted Second Homes

Earlier this session, two bills—S.280 and S.282—both sought to increase taxes on nonhomestead residential properties, a category that broadly includes second homes and vacation properties.

S.280 proposed “an increased education property tax rate for certain residential properties,” specifically targeting second homes and short-term rentals through a new classification system. The bill created a “nonhomestead residential” category and set its tax rate at $2.00 per $100 of value, compared to $1.00 for homestead properties, effectively doubling the base rate.

S.282, introduced later, included similar property tax classification language while also adding income tax surcharges and a new wealth-proceeds tax. Like S.280, it proposed taxing nonhomestead residential properties at a higher rate than primary residences and directing a portion of that revenue into a School Construction Aid Special Fund.

Neither bill advanced out of committee.

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Proposal Returns as Amendment Language

Despite failing to progress as standalone legislation, key elements of S.282 resurfaced this week during Senate Finance Committee discussions.

Sen. Tanya Vyhovsky ( P/D – Chittenden-Central District ) told the committee her proposed amendment would “take most of that language” from S.282, with updates and a delayed implementation timeline.

The amendment included multiple components, including tax provisions and the same second-home classification structure. Vyhovsky described that portion directly as “the second homes tax” intended to support school construction funding.

The proposal emerged in the context of broader discussions around H.955 and Vermont’s education funding system, raising concerns among some committee members about whether policy that had not advanced independently was being reintroduced through a different legislative vehicle.

Tension With Act 73 Structure

The reemergence of second-home tax language also intersects with Act 73, a sweeping education reform law passed in 2025.

Act 73 established a framework for restructuring Vermont’s education system, including district consolidation and a transition to a new foundation funding formula. Property tax classification changes—including distinctions affecting nonhomestead residential properties—were built into that broader system and tied to specific implementation conditions and timelines.

In committee, Vyhovsky acknowledged that the version of the second-home tax included in Act 73 was “contingent on many things,” referring to those structural changes.

Her amendment, however, took a different approach.

She said the proposal “is not contingent” and “goes into place,” signaling an intent to move forward independently of the broader Act 73 implementation timeline.

Legislative Counsel confirmed that the draft amendment was constructed to “remove those contingencies” and would not rely on the foundation formula or other components of Act 73’s restructuring.

That distinction marks a significant departure from the original structure of Act 73, which linked tax changes to system-wide reforms.

Process Questions Emerge

The discussion also highlighted procedural concerns about where and how such policy changes should be considered.

Questions were raised about whether second-home tax provisions should be addressed within education policy legislation rather than a separate tax bill, noting that taking them up independently could affect deliberations on related legislation.

The exchange underscores a broader legislative dynamic: while bills that fail to advance by crossover deadlines are generally considered stalled, their language can still be introduced later as amendments to other bills that remain active.

This practice allows policy proposals to continue moving through the legislative process even after missing earlier deadlines, provided they can be attached to a viable legislative vehicle.

Broader Implications

The reintroduction of second-home tax provisions raises both policy and process questions for lawmakers.

On the policy side, it reflects continued interest among some legislators in increasing taxes on nonhomestead residential properties as a source of revenue, particularly for school construction and education funding.

On the process side, it highlights how legislative rules—such as crossover deadlines—interact with amendment procedures that can keep proposals alive beyond their original path.

Whether the second-home tax language ultimately advances remains uncertain, as the proposal continues to be debated within the context of broader education and tax legislation.

But the committee discussion makes one point clear: proposals that stall early in the session can still reappear later, potentially in modified form, as lawmakers seek alternative routes to advance their policy priorities.

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Dave Soulia | FYIVT

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