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3VERMONT WITHHOLDING TAX RETURN
FOR TRANSFER OF REAL PROPERTY (Form RW-171)
GENERAL INFORMATION
4. The seller is a mortgagor conveying the mortgaged
property to a mortgagee in a foreclosure or transfer in
PURPOSE OF FORM -
A 2.5% withholding obligation is
lieu of foreclosure, with no additional consideration.
imposed on the buyer or other transferee (referred to herein
Please check the applicable box on the Property Transfer Tax
as “buyer”) when Vermont real property is acquired from a
Return Withholding Certification section (page 3 of the form)
nonresident of Vermont. The buyer must withhold 2.5% of
if one of these exemptions applies.
the consideration paid for the property. If the buyer fails to
withhold, the buyer will be personally liable for the amount
WITHHOLDING CERTIFICATE ISSUED BY THE
required to be withheld.
COMMISSIONER OF TAXES -
A withholding certificate may
WHO MUST FILE -
be issued by the Commissioner of Taxes to reduce or eliminate
A buyer of a Vermont real property interest,
withholding on transfers of Vermont real property interests by
including a corporation, limited liability company, partnership
nonresidents. A certificate may be issued if:
or fiduciary that is required to withhold tax, must file Form
RW-171. If two or more persons are joint buyers, each of them
1. No tax is due on the gain from the transfer;
is obligated to withhold. However, the obligation of each will
2. The seller or buyer has provided adequate security to
be met if one of the joint buyers withholds and transmits the
cover the tax liability;
required amount to the Commissioner of Taxes.
3. Reduced withholding is appropriate because the 2.5%
A nonresident individual is one who is domiciled outside the state
amount exceeds the seller’s maximum tax liability;
at the time of closing. A partnership, limited liability company
or a subchapter S corporation is deemed to be a nonresident of
4. Reduced withholding is appropriate to reflect the gain
Vermont if the controlling interest is held by nonresidents. A
allocated to a Vermont resident when there are both
corporation (other than a subchapter S corporation) that was
Vermont resident and nonresident sellers.
incorporated outside Vermont is a nonresident unless it has its
To obtain a certificate that no tax is due, or that a reduced amount
principal place of business in Vermont and does no business
may be withheld, call (802) 828-5860, x33.
in the state of incorporation.
WHEN TO FILE -
LINE-BY-LINE INSTRUCTIONS
A buyer must report and transmit the tax
withheld to the Commissioner of Taxes within 30 days after
(Use Blue or Black ink Only)
the date of transfer.
Form RW-171 is a two-page form. Please submit page 1
WHERE TO FILE -
File Form RW-171 directly with the
(signature page) and page 2 (Schedule A) together. Failure to
Commissioner of Taxes, Vermont Department of Taxes, 133
do so will result in the form being returned to the buyer.
State Street, Montpelier, VT 05633. Do not file this return
Lines 1-8. Enter the name, address, social security number or
with the town clerk.
federal ID number of each withholding agent (buyer), up to
EXEMPTIONS -
The buyer is not required to withhold or file
two buyers only.
this return if one of the following applies:
Line 9. Enter the location of the property, including town and
1. At the time of the transfer, the seller certifies to the buyer
street address.
on the Property Transfer Tax Return, under penalty of
Line 10. Enter the date the property was acquired by the seller.
perjury, the transferor’s social security number and the
fact that each seller is a Vermont resident or an estate.
Line 11. Enter the date of this transfer.
2. The buyer or seller has obtained a certificate from
Line 12. Enter the total contract sales price.
the Commissioner of Taxes in advance of the sale,
Line 13. Check the appropriate box to indicate the amount
stating that no income tax is due or that the parties
withheld. If the parties obtained a withholding certificate
have provided adequate security to cover the liability.
from the Commissioner of Taxes authorizing a reduced rate of
3. The buyer certifies on the Property Transfer Tax
withholding, enter the certificate number and attach a copy of
Return that this is a transfer without consideration. A
the certificate to the return.
transaction is NOT exempt if consideration is paid.
Line 14. Enter the dollar amount withheld.
Consideration paid includes the value of services or
Line 15. Enter the number of Schedule A’s filled out for this
goods, forgiveness of debt, or other items which are
property transfer. A separate Schedule A is required for each
deemed consideration under the Internal Revenue
individual or entity receiving proceeds from the transfer.
Code.
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