Vermont Current Use Program: What Happens to Enrolled Land When the Owner Dies

Vermont's Current Use program — formally called Use Value Appraisal — gives landowners with agricultural or forest land a significant property tax break. Instead of being taxed at fair market value, enrolled land is assessed at its use value: $537 per acre for agricultural land, $208 per acre for standard forest land, and $156 per acre for forest land located more than a mile from a class I, II, or III road (2026 values set by the Current Use Advisory Board).

For owners of large rural tracts, the tax savings are substantial. But the program attaches a permanent contingent lien to the land in the municipal records, and that lien does not disappear when the owner dies. Heirs inherit the land and its obligations together.

The Lien Runs With the Land

The Current Use lien is recorded in the local town land records and is attached to the property, not to the individual owner. When a Current Use enrolled property passes to heirs — whether through probate, joint tenancy survivorship, or a non-probate transfer mechanism — the new owners take the property subject to all of the program's restrictions and the full contingent lien.

This means heirs cannot simply withdraw the land from the program and sell it at market value without triggering the land use change tax. The lien remains until the property is formally withdrawn from the program, at which point the tax is assessed and must be paid.

What Happens During Estate Administration

The executor administering a Vermont estate that includes Current Use enrolled land has specific responsibilities:

Maintain the enrollment during administration. The estate is permitted to continue Current Use enrollment while the property remains in the estate's possession. Annual program requirements — including any certifications or enrollment renewals due during the administration period — must be met. Allowing the enrollment to lapse inadvertently can trigger the land use change tax unnecessarily.

Disclose the lien in the estate inventory. The Current Use lien must be noted in the estate inventory as an encumbrance on the property. It affects the property's marketable value and must be disclosed to any prospective buyers.

Transfer the enrollment to the heirs through myVTax. When the property is conveyed to the heirs — whether by executor's deed, operation of law, or other means — the Current Use enrollment needs to be administratively transferred to reflect the new ownership. All Current Use administrative actions now go through the myVTax portal. The legacy eCuse system was permanently discontinued on July 1, 2026. Heirs and executors who attempt to use eCuse after that date will find it non-operational.

The Land Use Change Tax: What Triggers It

The land use change tax is the penalty for withdrawing land from Current Use or triggering a disqualifying development. It is calculated as a percentage of the land's fair market value — not its use value — at the time of withdrawal. The rate has historically been 20% of the land's fair market value at the time of change.

Events that trigger the land use change tax include:

• Voluntarily withdrawing the parcel from the Current Use program
• Developing the land in a way that disqualifies it (construction, subdivision below the minimum parcel size)
• Transferring the land to an entity that does not qualify for enrollment (some corporate or commercial entities)

Events that generally do NOT trigger the land use change tax:

• Inheriting the land through probate or other transfer mechanisms — the transfer itself does not cause the tax
• Conveying the land to another qualifying owner who maintains enrollment
• The death of the enrolled owner, as long as enrollment continues

The key distinction: it is what happens to the land after the transfer that determines whether the tax is triggered, not the transfer itself. Heirs who intend to keep farming or maintaining forest land can typically maintain enrollment without any immediate tax consequence.

Partial Enrollment and Partial Withdrawal

Current Use enrollment is parcel-specific. If the decedent owned multiple parcels, some enrolled and some not, the executor must track each separately. It is also possible to withdraw only a portion of an enrolled parcel if a subdivision is created — the enrolled portion continues at use value, while the withdrawn portion becomes subject to the land use change tax only on the acreage removed from the program.

This can be a useful tool for heirs who want to develop or sell a portion of an inherited property while preserving the tax benefit on the remainder. However, subdivisions below the minimum qualifying size for the program may trigger total withdrawal. Vermont's minimum enrollment size is generally 25 acres for agricultural land and 25 acres for forest land, though existing enrolled parcels smaller than this can often maintain enrollment if they meet other criteria.

Practical Steps for Executors and Heirs

Step 1: Identify Current Use enrollment status. Check the town clerk's land records for the Current Use lien. The enrollment should also be documented in the decedent's property records or tax bills, which will reflect the use value assessment rather than the fair market value assessment.

Step 2: Contact the Vermont Department of Taxes. The Department of Taxes administers Current Use. Notify them of the owner's death and confirm the enrollment status, any upcoming certification deadlines, and the process for transferring enrollment to the heirs through myVTax.

Step 3: Include the lien in the estate inventory. Document the lien as an encumbrance, note the current use value assessment and the estimated fair market value, and calculate the theoretical land use change tax if the heirs chose to withdraw. This gives everyone involved a clear picture of the cost of different options.

Step 4: Transfer enrollment in myVTax. Once the heirs take ownership, initiate the enrollment transfer through the Vermont Department of Taxes myVTax portal. New owners need to meet the program's eligibility requirements — land must continue to be used for qualifying agricultural or forestry purposes.

Step 5: Decide whether to maintain enrollment. Heirs who do not intend to farm or manage the forest land as the program requires should understand their options: maintain enrollment and lease the land to a qualifying farmer or forester, sell the property with enrollment intact to a buyer who will maintain it, or withdraw from the program and pay the land use change tax. The decision has significant financial implications and may warrant consulting a Vermont agricultural attorney or the state's Current Use office.

Estate Tax Considerations for Current Use Land

For Vermont estate tax purposes (applicable to estates exceeding $5,000,000 in gross value), farmland enrolled in Current Use presents a valuation question. The estate tax is assessed on the fair market value of the gross estate, not the use value. This means a large farm with a low use value assessment for property tax purposes may still carry a substantial fair market value for estate tax purposes.

Federal law provides a special use valuation election (IRC § 2032A) that allows qualifying farm and ranch real estate to be valued at its current use value rather than fair market value for federal estate tax purposes — potentially a significant reduction. Vermont conforms to the federal gross estate definition for its own estate tax, so the federal special use valuation may also affect the Vermont estate tax calculation. This is an area where a CPA with agricultural estate experience can provide material value.

Current Use enrolled land adds procedural complexity to Vermont estate administration that is easy to overlook if you are focused solely on the probate process. The Vermont Survivor Benefits Navigator includes guidance on property-related obligations in estate settlement, including agricultural land, Current Use transfers, and the myVTax enrollment process.

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