One aspect that families preparing to move to Vermont often overlook is property tax. While Vermont is known for its beautiful nature and relaxed lifestyle, it is important to note that the property tax burden is among the highest in the nation.

The effective property tax rate in Burlington and Chittenden County is approximately 2.11%. The average in Vermont is around 1.92%, which is nearly double the national median of 1.02%, and Burlington is slightly higher than that.

The median home price in Burlington is roughly $370,000. Multiplying this by the effective tax rate of 2.11% results in an annual property tax of about $7,800. In reality, tax bills can vary significantly, ranging from the $6,800s to over $10,000 depending on the zip code.

Home insurance premiums tend to be relatively stable due to the low risk of major disasters like hurricanes or wildfires in the area. However, there are risks of winter freeze damage and spring thaw flooding, leading to annual costs often set between $1,100 and $1,400.

Maintenance costs are typically estimated at 1-2% of the home price, so for a $370,000 home, this would be between $3,700 and $7,400 annually. Many homes in Burlington are older, so it seems realistic to budget closer to the upper end, around $6,500, or about 1.75%.

When all three items are added together, the total annual cost of homeownership exceeds $15,000. This translates to about $1,250 per month, which is needed in addition to mortgage principal and interest. If this is not factored into the budget, it can lead to significant discrepancies in financial planning.

Vermont operates a Property Tax Credit (circuit breaker) program that helps alleviate the property tax burden relative to income. Residents who meet income requirements and submit a Homestead Declaration each year can receive a substantial refund on their taxes, making it particularly worth considering for families thinking about settling down after retirement.

Compared to nearby towns like South Burlington or Essex within Chittenden County, Burlington tends to have a slightly higher tax rate due to the school district budget. It's good to keep in mind that choosing a town within the same county can result in differences of thousands of dollars annually.

The first thought might be, 'Wouldn't it be better to rent with this level of tax?' However, in areas like Burlington where property taxes are high, the quality of schools and public services is often also high. Therefore, rather than judging solely by the tax rate, it is advisable to also consider the educational conditions for children.