For decades, affordable housing in the Bay Area focused almost entirely on rentals. Nearly all public funding went to building apartments for low-income families, while programs supporting h...
Vermont Property Tax Increases Are Squeezing Out First-Time Buyers
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Date:
04 May 2026
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Rising property taxes in Vermont are compounding an already severe affordability crisis, creating a two-sided squeeze that is pricing young buyers out of ownership while forcing landlords to raise rents — leaving an entire generation with no affordable path in either direction.
A Crisis Within a Crisis
The national conversation about housing affordability tends to center on mortgage rates and home prices. In Vermont, those factors are real — but they are being amplified by a force that gets far less attention: property taxes.
Joe Villemaire, founder and managing broker of Rockstar Real Estate Collective, says property taxes have become the variable that turns an already difficult affordability calculation into an impossible one for many buyers. When home prices roughly doubled over two years of post-COVID appreciation, and mortgage rates more than doubled from their historic lows, buyers were already stretched. Property taxes, he says, are the weight that breaks the equation entirely.
“Property taxes are probably one of the things that is a hard pill for a lot of buyers to swallow,” Villemaire says. “Our property taxes here in Vermont are a lot higher than in a lot of areas in the country.”
The result, in his view, is not just a slowdown in first-time buyer activity — it is the removal of an entire demographic from the market.
The Catch-22 Closing In on Young Buyers
The pressure on young buyers extends beyond purchase prices. Villemaire describes a feedback loop in which rising property taxes on rental properties force landlords to pass costs directly to tenants — the same renters trying to save for homeownership.
On a large multifamily property, the increases are substantial. Villemaire says a tax hike on a 54-unit complex can easily reach $50,000, a cost that landlords have little choice but to distribute across units. “Unfortunately, you have to pass that on to the tenants,” he says.
That dynamic means rising property taxes do not just affect buyers directly. They flow through to renters as well, raising the cost of the rental option that young buyers depend on while they try to accumulate savings and build credit. Both the ownership path and the rental path are becoming less accessible simultaneously.
Villemaire notes that this pattern is not unique to Vermont. But the state’s combination of high baseline property taxes, steep post-COVID price appreciation, and elevated construction costs for new rental supply makes the compounding effect particularly acute, especially in Chittenden County.
Established Owners Are Leaving
The property tax burden is also driving out-migration among established homeowners. Villemaire says he has worked with clients across multiple transactions over many years who are now concluding that Vermont’s cost structure no longer makes sense for their stage of life.
“They’re getting to the point where they’re like, cost of living is too high, property taxes are too high,” Villemaire says. “So they’re starting to sell here in Vermont, move to the Carolinas.”
The financial logic is straightforward. According to Villemaire, a Vermont home selling for $700,000 can be replaced with a comparable property in the Carolinas or Florida for $300,000 to $400,000, and the property taxes on that replacement home may be roughly 30% of what the seller was paying in Vermont. For retirees or near-retirees on fixed or semi-fixed incomes, that differential is decisive.
The departure of equity-rich homeowners has implications beyond individual financial decisions. It reduces the pool of move-up buyers who would otherwise free up starter inventory and shifts wealth out of the local market. If the pattern accelerates, it could eventually weaken demand in the mid-to-upper price tiers even as the entry-level market remains constrained by a lack of supply.
How One Firm Is Navigating the Squeeze
Understanding the full cost of ownership — including property taxes — has become central to how Rockstar Real Estate Collective advises buyers. Rather than focusing narrowly on purchase price and mortgage payment, the firm walks clients through the total carrying cost before they begin searching.
Villemaire says the goal is to ensure buyers are not surprised by costs that emerge after closing – a risk that is particularly acute in high-tax markets. “When you work with someone at Rockstar, you’re working with that agent, and they’re your main point of contact through every aspect of that transaction,” he says.
On the rental side, Villemaire says his management operation has tried to absorb cost increases where possible rather than passing them through immediately, in part because tenant stability has long-term value. His properties currently rent two-bedroom units at approximately $2,000 per month, below the $2,800 to $3,000 range he says newer properties are commanding — a gap he attributes partly to lower legacy financing and construction costs, and partly to a deliberate choice to remain competitive.
Rockstar’s approach represents one firm’s strategy in a market with limited options. Other property managers and brokerages across Vermont face the same pressures, and responses vary depending on portfolio size, financing structure, and tolerance for thinner margins.
Whether any of these approaches remain sustainable as property tax increases continue is an open question. Villemaire does not present his model as a permanent solution, but as a buffer available to operators with lower cost bases. For the broader market, Vermont’s experience may serve as an early indicator of what happens when property taxation becomes a primary affordability variable — and how housing markets respond when both the ownership and rental paths narrow simultaneously.
About the Expert: Joe Villemaire is the founder and managing broker of Rockstar Real Estate Collective, a Vermont-based brokerage and property management firm operating primarily in the Chittenden County market.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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