Vermont § 3610 - Taxation of perpetual leased lands

§ 3610. Taxation of perpetual leased lands

• (a) The term “perpetual lease” as used in this section includes every leasehold interest
  in land located in Vermont, and every estate in Vermont land other than fee simple
  absolute, arising out of or created by an instrument of lease that conveys to a person
  designated as lessee, the lessee’s heirs, executors, administrators, and assigns,
  the right to possess, enjoy, and use the land in perpetuity or substantially in perpetuity,
  whether or not the instrument of lease contains restrictions on the use of the subject
  land by the person designated as lessee and whether or not the subject land may be
  repossessed by the owner because of nonpayment of rent or of other default under the
  instrument of lease. The term “lessee” as used in this section means the person entitled
  to possess, enjoy, and use land subject to a perpetual lease. (b) The listers of each town and the appraisers of each unorganized town and gore shall
  list every perpetual lease in a separate record in which shall be shown as to each
  lease a brief description of the leased land, the fair market value of the land as
  appraised by them, the name of the lessor, the annual rental payable under the lease,
  and as of April 1 of each year the name and address of the lessee. If for any reason
  the lease is exempt under subsection (d) of this section, the reason for the exemption
  shall be noted. (c) For purposes of section 3481 of this title, the appraised value of each perpetual lease not exempt under subsection (d) of this
  section shall be its market value as determined by the listers or appraisers, taking
  into consideration all limitations upon the use of the land by the lessee that substantially
  diminish the value of the lessee’s right to occupy, use, or enjoy the land; but in
  no event is the appraised value of a perpetual lease to be in excess of the fair market
  value of the subject land as determined by the listers or appraisers. (d) A perpetual lease is exempt from taxation against the lessee if so provided by an
  express term of the original grant of the subject land by the State of Vermont, or
  by a statute in effect at the time of the grant providing for exemption in perpetuity
  of the leases, or if the subject land would be exempt under chapter 125 of this title
  if the lessee were the owner of the land. (e) Except as provided in subsection (d) of this section, every perpetual lease, whether
  or not the subject land is exempt from taxation, shall be set in the grand list as
  real estate against the lessee. (f) The annual rental payable under a perpetual lease shall be credited in each year against
  the tax payable in respect of that lease to the town in which the subject land is
  located. (g) Any tax levied by authority of this section shall be collected in the same manner
  as real estate taxes. The selectboard, treasurer, and collector of taxes have the
  same authority and are subject to the same duties, requirements and penalties with
  respect to the collection of the tax as is provided in the case of real estate taxes.
  A town may vote to collect interest on overdue taxes and for the payment of the taxes
  by installments as in the case of real estate taxes. (h) Commencing with the date of the filing by the listers of the grand list in the office
  of the town clerk, taxes lawfully assessed upon a perpetual lease shall be a first
  lien thereon, underlying all mortgages, assignments, attachments, liens, or other
  encumbrances thereon, and all subleases for the term of a natural life or lives, for
  a term of years or for any other duration. The tax lien shall remain in full force
  and effect for a period of 15 years, and it may be enforced separately against the
  perpetual lease in each parcel of the subject real estate. Notice to all parties having
  an interest in the perpetual lease shall be given as provided by law or as directed
  by courts. Courts of law may issue execution, as the facts warrant, to impress the
  tax lien upon the perpetual lease. (i) A perpetual lease is subject to sale in the same manner and subject to the same procedures,
  notices, defenses, and statutes of limitations as in the case of tax sales of real
  estate. Any person acquiring a perpetual lease, under the authority of this section,
  is subject to the person’s portion of the annual rental due the grantee. (Added 1967, No. 366 (Adj. Sess.), § 1; amended 2021, No. 105 (Adj. Sess.), § 514, eff. July 1, 2022.)