Section 10 060 037 - PROPERTY TAX REBATE REGULATION1.5961(7)-1 (Effective 11/20/95) Rent constituting property taxes (a) Purpose: The purpose of this regulation is to clarify how landlords are to allocate property taxes to rental units and how renters may dispute an allocation made by a landlord. (b) Relevant statute: 32 V.S.A. § 5961(7) provides in relevant part:
"Rent constituting property taxes" means for any homestead and for any taxable year, that portion of the gross rent actually paid during the taxable year by the individual or other members of the household solely for the right of occupancy of the homestead during the taxable year, which equals the property tax allocable to the claimant's rental unit for the period rented by the claimant.
(c) Amount certified The amount certified by landlords shall be the lesser of property tax allocable to the rental unit and the rent paid solely for the right of occupancy. In instances where the property tax allocable to the unit exceeds the rent paid for right of occupancy, such as may be the case with subsidized housing or rents significantly below market or when the rent has not been paid, special rules apply. See paragraph, (i) below.(d) Property tax allocable to the claimant's rental unit for the period rented by the claimant To determine the property tax allocable to a rental unit, except nursing homes, community care facilities and like facilities and boarding houses, any of the following allocation methods may- be used by the landlord. The same method of allocation must be used for every unit in the rental building and the landlord shall indicate on the certificate the method used to allocate property tax to rent.(e) Allocation methods Property tax must be allocated to rental units using one of the following methods: (1) Divide the total property tax assessed on the rental property by the number of rooms available for residential use in the rental building and multiply that result by the number of rooms occupied by the claimant and multiply by the percentage of the year that the claimant occupied the rooms as a homestead and paid rent;(2) Determine the percentage of square footage each unit in the rental building occupies and multiply that percentage by the total property tax assessed on the rental building and multiply that result by the percentage of the year that the claimant occupied the unit as a homestead and paid rent;(3) Determine the percentage of rent charged for the claimant's unit relative to the total rental value of the rental building for a twelve month period and multiply that result by the total tax assessed on the rental building and multiply that by the percentage of the year that the claimant occupied the unit as a homestead and paid rent;(4) If a separate appraisal of the rental unit has been done by the town in which the rental unit is located, multiply the separate value of the unit occupied by the claimant by the tax rate multiplied by the percentage of the year that the claimant occupied the unit as a homestead and paid rent.(f) Nursing homes. community care facilities and like facilities and boarding houses Rent allocable to property tax in the case of nursing homes, community care and like facilities and with respect to boarding houses shall be determined by dividing the entire property tax on the structure or structures and two acres (but excluding facilities such as swimming pools) by the number of bedrooms in the structure or structures. If the claimant occupies a shared room the result shall be divided by the number of persons sharing the room.(g) Condominiums and other cluster housing In determining property tax allocable to condominiums and other cluster housing, whether detached or having common walls, the total acres commonly owned shall be divided by the number of housing units. This result up to two acres shall be considered part of each housing unit.(h) Mobile home lots The property tax allocable to a mobile home lot may be determined in the following ways: (1) tax on the total acreage of the entire mobile home park property necessary for use as a mobile home park may be divided by the number of lots available for occupancy; (2) the ratio of square footage of the lot to the total square footage of the park property may be multiplied by the total taxes due on the park property; or (3) the ratio of the rent paid for the lot to the rent chargeable on all of the lots may be multiplied by the taxes due on the park property. (i) Solely for the right of occupancy In instances where it is necessary to determine the rent paid solely for the right of occupancy, the cost of certain items included in the rental price, such as heat, electricity, furnishings, personal care or other services, must be excluded. One method of determining the amount to be excluded is to add the actual cost of such items for the rental building and divide by the number of units. The allocation method described above in (e)(1) o (e)(2) may also be used. Operators of nursing homes and community care homes who cannot determine specific excludable charges must exclude 75% of the total charge. Operators of boarding houses who cannot determine specific excludable charges must exclude, 50% of the total charge. (j) Appeals If a claimant disagrees with the allocation made by his or her landlord and files a claim based on a different allocation of property tax to the rental unit, and the Department reduces the claim based on the landlord's allocation, the claimant may appeal the reduction in the same manner as provided in 32 V.S.A. § 5883 and § 5885 with respect to notices of deficiency or assessment of penalty.
In a hearing before the commissioner, the burden shall be on the claimant to show that the allocation used by his or her landlord is not one of the methods prescribed in paragraph (e). If any of the methods described in this regulation is used by the landlord, it will be accepted. If the commissioner determines that the landlord did not use one of the prescribed allocation methods, then the claimants, allocation and the allocation of all the tenants in the building shall be changed to reflect one of those methods.
(k) Examples (1) A claimant occupies a three room apartment in a three unit apartment building. He pays $ 325 a month for rent. One of the other apartments has five rooms; the third apartment is a two room efficiency. The claimant's apartment occupies 30% of the square footage of the building. The apartment is unfurnished and claimant pays his own utilities. The property tax on the building is $ 2,400 a year. The landlord may determine rent constituting property tax as follows: (A) $ 2,400 10 (no. of rooms in bldg.) = $ 240 x 3 = $ 720
-or-
(B) $ 2,400 x 30% = $ 800 -or-
(C) $ 1,025 (total monthly rent for bldgc.) $ 325 (claimant's monthly rent) = 32% x $ 2,400 = $ 768
(2) The same facts as (a) except the claimant has only occupied the apartment since July 1. After calculating "rent constituting property tax" by one of the above methods, the landlord multiplies the result by 50%, the percentage of the year the claimant has occupied the apartment.(3) The same facts as (a) except that the claimant's rent included heat. Heat for the building costs $ 900 a year. The landlord would calculate "rent constituting property tax'' using any of the above methods because even with the cost of heat excluded, it is apparent that the rent claimant pays exceeds the property tax allocable to the apartment.(4) The claimant's four room subsidized apartment occupies 25% of the square footage of her apartment building. Her portion of the rent, $ 150, includes heat and electricity. The property taxes on the house are $ 6000 a year. The annual heating and electricity costs for the entire house are $ 2000. Because in these circumstances the claimant's rent paid solely for the right of occupancy may be less than the property tax on her unit, the landlord must exclude the value of the heat and electricity from the claimant's rent payment. The landlord can do this based on the number of rooms in the apartment in relation to the number of rooms in the entire house or the square footage of the apartment in relation to the total square footage of the house. Allocating 25% of the cost of the heat and electricity to claimant's apartment leaves $ 1,300 as rent paid solely for the right of occupancy (gross rent of $ 1,800 less $ 500, the value of her heat and electricity). The rent less heat and electricity is less than "rent constituting property taxes" determined under the methods above ($ 6000 x 25% = $ 1,500):
rent per year | $ 1,800 | property tax on bldg. | $ 6,000 |
value of heat | | claimant's portion of | |
and electricity | 500 | tax based on area | 25% |
rent solely for | | property tax allocated | |
rt. of occupancy | $ 1,300 | to unit | $ 1,500 |
Therefore, "rent constituting property tax' is limited to the lesser of these, or $ 1,300.
(l) A landlord's failure to certify an amount of rent constituting property taxes will not disqualify a claimant from the rebate program. If unable to obtain a certificate from a landlord, a claimant should mail the following items to the Department by the filing deadline: a landlord certificate (Form 103-LC) completed through line 1; a Homeowner or Renter Rebate Claim (Form 103-PR) completed through line I of the calculation; receipts or cancelled checks to substantiate rent paid; and a note explaining that a certificate was not received from the landlord and giving the landlord's name, address and telephone number.10-037 Code Vt. R. 10-060-037-X
EFFECTIVE DATE:
November 20, 1995 (Secretary of State Rule Log #95-75)Statutory Authority
32 V.S.A. § 5961(7)