Vermont handles property tax collection and tax sales at the town level, not the county level. This makes Vermont unique compared to most other states. When a property owner falls behind on taxes, the municipal tax collector for that specific town or city initiates the delinquent tax process. If the property is eventually sold and the sale produces more than what was owed, the excess becomes surplus funds that the former owner may be entitled to claim.
The 2023 Supreme Court ruling in Tyler v. Hennepin County established that governments cannot keep surplus proceeds from tax sales, and Vermont has since implemented guardrails to comply with this decision. As of 2024, the state has strengthened protections for former property owners, ensuring that towns cannot simply pocket excess proceeds from tax sales. These reforms are good news for anyone who lost property to a municipal tax sale in Vermont.
How Vermont's Town-Level Tax Sales Create Surplus Funds
In Vermont, municipal tax collectors are responsible for collecting property taxes and pursuing delinquent accounts. When taxes remain unpaid, the town can eventually sell the property to recover the debt. If a property sells for more than the outstanding taxes, interest, penalties, and costs, the difference is surplus. For example, if a home in a Vermont town owed five thousand dollars in back taxes but sold for twenty-eight thousand dollars, the remaining twenty-three thousand dollars is surplus that belongs to the former owner.
Because Vermont operates at the town level, there is no single county office managing these sales. Each of Vermont's 251 towns and cities handles its own tax collection independently. This decentralized system means you need to contact the specific municipality where your property was located to find out if surplus funds exist. Following the 2024 post-Tyler guardrails, towns are now required to account for and return surplus proceeds rather than absorbing them into municipal budgets.
Key Vermont Municipalities With Surplus Fund Activity
Burlington is the largest city in Vermont and has the highest volume of property tax activity in the state. With property values continuing to rise in the Burlington area, tax sales here can produce significant surplus amounts. Contact the Burlington city tax collector's office to inquire about excess proceeds from any recent or past tax sales involving your property.
Rutland is the second largest city in Vermont and has dealt with higher rates of tax delinquency relative to its size. This means Rutland sees a steady number of tax sales each year, and surplus funds can result when properties sell above the amount owed. The Rutland city treasurer's office manages these proceeds and can provide information about available funds.
Montpelier, the state capital, is one of the smallest capital cities in the country but still conducts municipal tax sales. Even in smaller communities like Montpelier, rising property values can produce surplus when tax-delinquent properties are sold. The town clerk or tax collector can direct you to the right office for filing a surplus funds claim.
How to Search for Your Vermont Surplus Funds
Start by contacting the tax collector or treasurer in the specific town or city where your property was located. Have your property address and any available parcel information ready. Ask whether your property was sold at a tax sale and whether surplus funds were generated. You should also check the Vermont State Treasurer's unclaimed property database, as some funds may have been transferred there.
Because Vermont operates at the municipal level, you may need to make multiple inquiries if you owned properties in different towns. The 2024 reforms following Tyler v. Hennepin mean that towns now have clearer obligations to return surplus, but the process still requires you to come forward and file a claim. This article is for informational purposes only and is not legal advice.
Do Not Overlook Your Vermont Surplus Funds
Vermont's town-level system means surplus funds can be scattered across hundreds of municipalities, making them easy to miss. But the post-Tyler reforms have strengthened your rights as a former property owner. If you lost property to a tax sale in Vermont, surplus funds may be waiting at your local town office.
Use our Vermont surplus funds directory to browse available records and begin your search. Whether your property was in Burlington, Rutland, Montpelier, or a smaller town, the first step is finding out if surplus funds exist from your sale.