Vermont listers and assessors are required to list all taxable property each year at its fair market value. Fair market value is the price a property is likely to bring if sold on the open market by a willing seller to a willing buyer, both equally well informed and not under any compulsion to sell or purchase. However, listed values often do not reflect fair market value. This is because real estate markets are always changing and because reappraisals are not conducted annually. In order to treat all municipalities fairly throughout the state, grand list values are adjusted annually to bring each municipality’s grand list to fair market value. The adjustment is made through the equalization study described in this publication. In general, the equalization study is based on a review of sales of real estate in each municipality throughout the state and the computation of a ratio of listed-value-to-sale-price on those sales that meet the criteria for an arm’s length sale. The criteria for an arm’s length sale include: a willing seller and a willing buyer with no significant prior relationship; reasonably equal access to knowledge about the property; and absence of compulsion to sell or buy. The ratios computed from the sample are applied to all similar property types within that municipality to determine a reliable estimation of the total fair market value of all taxable properties in the municipality.
Equalization studies have been performed in Vermont since 1963. Similar studies are regularly conducted by state governments in most of the United States for much the same reasons that they are conducted in Vermont.
Click here to view Panton's 2022 Equalization Study.