Use enrollment with the sale. But if you carve land out, expect a bill.
Who Should Consider Current Use?
-
Farmers & Large Landowners – If you’re committed to farming or forestry long-term, it makes landownership financially possible.
-
Homesteaders with 25+ Acres – Vermont requires at least 25 contiguous acres to enroll. If you’re at that threshold and plan to keep it, it may make sense.
-
Multi-generation Families – If land is staying in the family indefinitely, the program’s restrictions may not pose an issue.
When you own land in Vermont, you quickly learn that property taxes are one of the biggest costs you’ll face. For many families and farmers, those bills can make it nearly impossible to keep large parcels of land intact. That’s where Vermont’s Current Use Program — officially called the Use Value Appraisal Program — comes in.
On the surface, Current Use is a lifesaver. It lowers your property tax bill by taxing land based on its productive value (as farmland or managed forest) instead of its full market value. For landowners, the difference can mean thousands in savings each year. But what many people don’t realize — and what I learned the hard way on my old 37-acre farm — is that once you enroll, there are strict rules about what happens if you ever sell, subdivide, or withdraw acreage.
What Is Current Use?
The Current Use Program was created in 1978 to keep Vermont’s working lands — farms and forests — from being developed into housing tracts or vacation estates. It works like this:
-
You apply to have your farmland or forestland enrolled.
-
The state sets a lower “use value” tax rate, based on agricultural or forestry productivity.
-
You agree to use the land according to program rules (growing crops, managing timber, etc.).
-
As long as it stays in Current Use, you get a reduced tax bill every year.
For many Vermont farmers, this is the only way to keep large parcels affordable.
The Strings Attached
Here’s the part people often miss: once land is in Current Use, withdrawing it comes with a penalty.
-
If you develop, sell, or withdraw land, the state charges a Land Use Change Tax.
-
The penalty is based on the fair market value of the land being withdrawn.
-
Even small acreage withdrawals can trigger large bills.
This is designed to discourage people from enrolling land just to get the tax break, then flipping it for development. But it can also hit ordinary families hard when circumstances change.
My Experience: 37 Acres and a $6,000 Lesson
Years ago, I enrolled my 37-acre farm in Current Use. At the time, it felt like the smart thing to do. The tax savings helped me keep the land while running the farm, and on a property that size, the annual benefit was substantial.
Fast-forward: when it came time to sell, I didn’t want to part with everything. I wanted to keep 7.5 acres across the road, where the barn stood. That seemed reasonable — a way to hold onto a manageable piece of the farmstead without the overwhelming burden of the full 37 acres.
What I didn’t fully expect was the penalty. Withdrawing that 7.5 acres from Current Use triggered a Land Use Change Tax of more than $6,000. It was a gut punch. Even though the land was still going to be used with a barn, the state calculated the penalty on its fair market value, and I had no choice but to pay it.
In that moment, I realized how important it is to understand the long-term consequences of enrolling in Current Use. The program saved me money for years, but when I tried to change course, it took a chunk right back.
Lessons for Other Homesteaders
1. Think Long-Term
If you plan to keep your land intact for decades, Current Use can be a blessing. But if there’s even a chance you’ll sell, subdivide, or hold onto just part of the parcel, you need to weigh the potential penalties.
2. Penalties Can Be Substantial
Even small acreages — like my 7.5 acres — can carry penalties in the thousands. Don’t assume a small piece won’t matter.
3. It’s Not Just Development
People assume the tax only applies if you “develop” the land into houses. Not true. Withdrawing land for any reason — even to keep a barn or carve out a small homestead lot — triggers the change tax.
4. Communication Matters
If you’re selling, talk to your lawyer and the Vermont Department of Taxes early. Sometimes buyers want the whole parcel enrolled, and you can avoid penalties by transferring the Current Use enrollment with the sale. But if you carve land out, expect a bill.
Who Should Consider Current Use?
-
Farmers & Large Landowners – If you’re committed to farming or forestry long-term, it makes landownership financially possible.
-
Homesteaders with 25+ Acres – Vermont requires at least 25 contiguous acres to enroll. If you’re at that threshold and plan to keep it, it may make sense.
-
Multi-generation Families – If land is staying in the family indefinitely, the program’s restrictions may not pose an issue.
Alternatives and Small Homesteads
For smaller properties like my 2.5-acre homestead today, Current Use isn’t even an option — the minimum acreage is too high. Instead, the real relief comes from filing a Homestead Declaration and applying for the Property Tax Credit based on income.
That’s why I often tell new homesteaders: don’t romanticize big acreage if it’s going to strain your finances. My 37 acres looked great on paper, but between taxes, upkeep, and the penalty when I sold, it wasn’t sustainable for me. The 2.5 acres I own now, free and clear, are manageable — and I’ll never see a $6,000 surprise bill from Current Use again.
Closing Thoughts
Vermont’s Current Use Program was built with good intentions — to preserve farmland and forestland in a state where development pressures are real. For many, it’s the only reason they can keep their land. But it’s not a one-size-fits-all solution.
My advice? If you’re considering it, run the numbers both ways. Ask yourself: Will I truly keep this land intact long-term? If the answer is yes, Current Use could save you thousands. If the answer is maybe, be prepared for what happens if you need to withdraw.
Because as I learned when I carved out 7.5 acres with a barn, the savings can vanish quickly once the Land Use Change Tax comes due. In my case, that “small piece” cost me over $6,000.
For today’s homestead — smaller, simpler, and sustainable — I no longer need the program. But I share my story so other Vermonters can walk in with their eyes open.