I think there’s one Vermont-specific piece here that will make this a lot less scary once you separate it out: a 57% CLA does not mean everybody’s property-tax bill is about to increase by 43%, and it definitely doesn’t mean a property whose assessment nearly doubles will automatically have a tax bill that nearly doubles.
The CLA is basically telling you how the town’s grand-list values compare with estimated fair-market value across the municipality. A 57% CLA means the town’s assessments, in aggregate, are running at roughly 57% of market value. Vermont uses that adjustment precisely because different towns can go years between reappraisals while market prices keep moving. ([Vermont Tax][1])
When the town finally reappraises and brings assessments closer to market, the denominator changes too. If the whole town’s taxable value jumps substantially, the municipal tax rate generally has to fall correspondingly if the municipality is trying to collect the same amount of money. The town doesn’t suddenly need twice as much revenue just because somebody changed the numbers in the grand list.
That’s why I would not underwrite a Vermont property by taking the future estimated assessment and multiplying it by today’s mill rate. That can produce an absolutely terrifying number that has very little relationship to the eventual tax bill.
The thing I would worry about is how much this particular property changes relative to the rest of the town.
Imagine the average property in town gets reappraised upward by 75%, but the multifamily you’re buying goes up 100%. Your tax burden can increase because your property is now carrying a larger share of the town’s taxable value. If your building goes up roughly in line with everybody else, the assessment number may look dramatically larger while the resulting tax change is much less dramatic.
That relative movement is what I’d try to underwrite.
I’d start with the current tax bill and then estimate the property’s current equalized market value using the CLA as one reference point. If a property is assessed at $200,000 in a town with a 57% CLA, the rough town-level equalized value is closer to $351,000. That doesn’t mean the assessor will value that exact property at $351,000, because CLA is a municipal aggregate rather than a parcel-specific appraisal, but it gives you a much better reference than pretending the $200,000 assessment is economically meaningful by itself.
Then compare that with the price you’re actually considering paying and with real sales of similar multifamily properties. If the equalized value, purchase price, and comparable sales are all living in roughly the same universe,
I’d be much less worried about the reappraisal than I would be if the property appears dramatically underassessed even after accounting for the town’s low CLA.
For investment underwriting, I’d probably run three tax cases rather than pretend I can predict the assessor to the dollar. I’d have a reasonable case based on the property moving roughly with the rest of the town, a conservative case where this property takes a somewhat larger share of the tax burden after reappraisal, and a genuinely ugly case. Then I’d see whether the deal survives all three.
The important part is that I would stress the tax bill, not just the assessment.
There’s another reason for that in Vermont: education-property taxation is already tied into the equalization system. CLA exists in large part so towns with stale assessments don’t automatically contribute too much or too little simply because their grand lists were last updated at different times. Vermont’s own guidance describes the equalization study and CLA as the mechanism used to bring municipal grand lists back toward fair-market value for education-tax purposes. ([Vermont Tax][1])
The statewide reappraisal environment is real, but the rules have also evolved. Current Vermont law requires municipalities to commence a full reappraisal no later than six years after the start of their most recent full reappraisal unless the State approves a longer period, and beginning in 2029 the State moves toward regional assessment districts operating on six-year schedules. So I’d treat periodic reappraisal as part of owning Vermont real estate rather than as a one-time anomaly you somehow have to predict perfectly.
I’d also call the town assessor or lister before making an offer. Not to ask, “What will my taxes be?” because they probably cannot promise you that. I’d ask how the reappraisal is being performed, when the new grand list is expected, what sales period is being used, whether multifamily is being treated as its own property category, and whether they can point you toward preliminary values or methodology.
That conversation can tell you whether your biggest uncertainty is actually the reappraisal or whether you’re just looking at a scary CLA number without enough context.
And I would absolutely keep your instinct to invest locally if that’s where you want to learn. A difficult tax environment doesn’t automatically make a bad investment market. It just means taxes deserve to be treated as one of the principal variables rather than a line item you drag forward from last year.
In fact, learning to underwrite Vermont correctly could become an advantage. If other buyers see a 57% CLA, multiply tomorrow’s assessment by today’s tax rate, panic, and walk away, while you understand what the number actually represents, you may occasionally be able to price uncertainty better than they can.
The mistake isn’t being conservative.
The mistake is being conservative about the wrong number.
[1]: https://tax.vermont.gov/sites/tax/files/documents/RP-1295-2024.pdf?utm_source=chatgpt.com "January 2022"