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Rental property LLCs in Vermont

Yes, you can hold a Vermont rental in an LLC. You file Articles of Organization with the Secretary of State for $155 and then an annual report for $45, due within three months after the LLC's fiscal year ends. The Vermont catch is the property transfer tax, which taxes deeds and also a transfer of 50 percent or more of an LLC: a deed to your own LLC may escape it, but only if the return claims an exemption you qualify for, and a habitable house bought for short-term rental or second-home use is taxed at 3.62 percent instead of the 1.47 percent for a long-term rental. Burlington and Winooski register and inspect rentals and both want a new registration when title transfers. Forming the LLC doesn't move your deed or stop a lender's due-on-sale clause.

Last checked 2026-10-25. General information, not legal or tax advice.

Local rental rules come first

Burlington. Chapter 18 of the Code of Ordinances requires the owner of each rental unit subject to inspection to file a registration application and fee every year on or before April 1, and bars renting a unit "without a certificate of compliance or interim certificate" (§§ 18-15(a), 18-18(a)). The code sets the fee at $120 per unit per year, or $80 for an owner-occupied building of two or fewer units and for a partial-unit short-term rental, plus another $120 for a whole-unit short-term rental, and unpaid charges are a lien on the property (§ 18-30(a)). The city's rental FAQ still lists lower amounts, so confirm the figure with the Housing Division. A clean inspection earns a certificate good for five years; the term shortens to as little as one year as violations pile up (§ 18-19). Fines start at $100 for a first violation and $200 for a second (§ 18-31). A deed to your LLC is a transfer: on "purchase or transfer of property containing a rental unit" the transferee files a new registration and a $50 fee (§ 18-15(b)). An owner who doesn't live in Chittenden County must name a managing agent in the county, and every property needs a Chittenden County emergency contact (§ 18-15(a)(1)(h)). The form asks for the registered agent and president if the owner is a corporation (§ 18-15(a)(1)(g)); ask the Housing Division what it wants from an LLC.

Burlington short-term rentals. The same registry covers hosts. A host may register their primary residence as one whole-unit short-term rental, or up to three rooms in it. In buildings or lots with fewer than five dwelling units a host may also register a unit on the same building or lot as their primary residence. Anywhere else a whole-unit rental is allowed only for a seasonal home on the assessor's records or in a building where the host rents another unit that meets the inclusionary-zoning affordability criteria or goes to a tenant with federal or state rental assistance. An owner-host proves primary residence with a homestead declaration, and "A host may not use multiple corporations or other entities to register more than one (1) whole unit short term rental" (§ 18-15(a)(3), (f)). The city's rental FAQ adds that the host must be the primary contact and "cannot have a property management company handle it for you." That leaves little room for an LLC-owned investment property as a Burlington short-term rental, so ask before you buy for that purpose.

Winooski. Every rental must be on the Public Building Registry, regardless of lease length, with a yearly application and a life safety and housing code inspection every four years, and a purchaser files a new application on any "purchase or transfer" (Winooski Mun. Code §§ 17.01, 17.03(B), 17.04). The fee is $115 per unit, due April 1 (§ 28.03). Short-term rentals also need a separate city license, only available to properties already on the registry: $250 per unit per year if owner-occupied (meaning the property meets the state homestead definition) and $1,400 if not, with proof of insurance that expressly covers short-term rental use (Winooski Short Term Rentals page; §§ 17.12, 17.13).

Barre. The city invoices a rental registry fee of $75 per dwelling unit each July 1, with a 10 percent penalty after that (City of Barre Rental Registry Invoicing page).

Statewide, long-term rentals. Landlords can't charge an application fee for a residential unit, can't make a tenant waive the warranty of habitability, and must return a security deposit with an itemized statement within 14 days or forfeit the right to withhold any of it (9 V.S.A. §§ 4456a, 4457, 4461). The state's own inspections run on complaints, with administrative penalties up to $1,000 per violation (20 V.S.A. § 2677). Every landlord also files a Landlord Certificate with the Department of Taxes by January 31 for each property rented 30 or more days in a row, and a knowing failure carries a $200 penalty (32 V.S.A. § 6069; Department of Taxes). I found no state license or registration for long-term rentals beyond that certificate.

Statewide, short-term rentals. A short-term rental is a furnished dwelling rented for fewer than 30 consecutive days and more than 14 days a year (18 V.S.A. § 4301(a)(17)). The state taxes it at 9 percent rooms tax plus a 3 percent surcharge, with another 1 percent in towns that adopted a local option tax; a platform that lists the unit registers and collects, but a host who also books direct must register, which is free (32 V.S.A. § 9301; Department of Taxes). Operators post the Division of Fire Safety's guidance and a phone number for the person responsible, the Division's checklist is to be left in the unit, and every advertisement must carry the unit's meals and rooms tax account number (20 V.S.A. § 2678; 18 V.S.A. § 4467; 32 V.S.A. § 9282; Division of Fire Safety). That tax license is free but "nonassignable and nontransferable," so an LLC that takes over a rental business registers its own (32 V.S.A. § 9271). The Department of Taxes says a lodging license from the Department of Health is needed at three or more units or when food is prepared on site. Towns may regulate short-term rentals by ordinance if it doesn't adversely affect long-term rental housing (24 V.S.A. § 2291(29)). Beyond the tax account, I found no statewide short-term rental registry or license.

Elsewhere in Vermont. Rental and short-term rental rules are local. Ask the town clerk and zoning administrator before the first lease.

What the LLC protects, and what it doesn't

Vermont's LLC Act says an LLC's debts and liabilities "do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a member or the manager acting as a manager" (11 V.S.A. § 4042(a)). Skipping formalities "is not a ground for imposing liability on a member or manager" (§ 4042(b)).

  • Guarantees still bind you. A personal guarantee you sign for a lender is your own agreement.
  • Your own acts are yours. The shield applies "solely by reason of" being a member or manager, so a repair you botch yourself or your own negligence isn't covered by the LLC.
  • It isn't insurance. The LLC still needs coverage that pays claims and defense costs. Ask a Vermont attorney how a court would treat your facts.

One LLC, or one per property?

Separate LLCs keep one property's judgment away from the others, at $155 to form and a $45 annual report for each LLC, plus an agent and, in Burlington or Winooski, a registration per property. Vermont has no series-LLC option that I could find: the word "series" appears in the LLC Act (chapter 25) only once, in § 4111(a), where the law of a foreign LLC's home state governs liability for the debts of the company "or series thereof." Title 9's voidable-transactions chapter defines a "series organization" formed under another state's law (9 V.S.A. § 2295), but nothing in chapter 25 lets you form one here. So separate properties means separate LLCs. More: Should you have a separate LLC for each rental property?. Other states: All rental property LLC guides · New York · Massachusetts.

Form it where the property is, or register there

The simplest setup is a Vermont LLC for Vermont property. A foreign LLC "may not transact business in this State until it obtains a certificate of authority" (11 V.S.A. § 4113(a)). The application needs a certificate of existence from the home state dated within the prior 90 days (§ 4112(c)) and costs $155 (§ 4012(a)(2)). The statute's list of activities that without more don't count includes "owning real or personal property" (§ 4113(c)(9)), but leasing isn't on that list, and the Secretary of State's foreign registration page warns that a business whose activities merely include listed items isn't exempt, so ask a Vermont attorney before you rely on it. Without a certificate, a foreign LLC can't maintain a proceeding or raise a counterclaim, crossclaim or affirmative defense in a Vermont court until it registers, which matters if you need to collect rent or evict (§ 4119(a)). It also owes a $50 civil penalty a day, capped at $10,000 a year, plus the fees it would have paid (§ 4119(e)). Its contracts stay valid and its members aren't liable just for that failure (§ 4119(b), (c)). A registered foreign LLC then pays a $170 annual report, not $45.

What it costs the state

  • Articles of Organization: $155 (11 V.S.A. § 4012(a)(1); Secretary of State fee schedule); the Secretary of State says online filing normally takes less than one business day with no extra fee, and mail filings take 7 to 10 business days
  • Annual report: $45, due within three months after the end of the LLC's fiscal year; the Secretary of State says to search the business online for its fiscal year end on record (§§ 4012(a)(15), 4033(c); Secretary of State annual reports page)
  • Name reservation (optional): $25
  • Reinstatement after termination: $35 for each year the annual report was missed, plus each missed report's fee (§§ 4012(a)(17), 4034(a)(3))
  • Statement of change of agent or designated office: $35
  • Foreign LLC certificate of authority: $155, then a $170 annual report
  • Business entity income tax: a $250 minimum generally applies to an LLC taxed as a partnership or S corporation; the Department of Taxes page doesn't address a disregarded single-member LLC (see Insurance and taxes)
  • EIN: free from the IRS

Compare services: LLC services compared.

Forming the LLC, in order

  1. Pick a name that contains "limited liability company," "limited company," or an abbreviation such as "LLC," "L.L.C.," "LC" or "L.C." (11 V.S.A. § 4005(a)). It must be distinguishable from the names on the Secretary of State's records (§ 4005(b)). A $25 reservation holds one.
  2. Choose a designated office, which needn't be in Vermont, and an agent for service of process (§ 4007). The Articles list the street address of the agent.
  3. File the Articles of Organization online ($155). They give the company name, designated office address, agent name and street address, and each organizer's name and address (§ 4023(a)). The LLC exists when the Articles are filed (§ 4022(b)).
  4. Write an operating agreement.
  5. Get an EIN and open the LLC's bank account.
  6. Register each rental with its city (above) once the deed records, and file the Landlord Certificate each January 31. If you take short-term guests, register with the Department of Taxes for rooms tax if you book direct.
  7. Calendar the annual report from the LLC's fiscal year end.

Forming the LLC doesn't move your deed

Putting your rental in the LLC takes a new deed. A deed "shall not be effectual to hold such lands against any person but the grantor and his or her heirs, unless the deed or other conveyance is acknowledged and recorded" (27 V.S.A. § 342). The town clerk records it and receives the Property Transfer Tax Return at the same time (32 V.S.A. § 9606(a)(1)). The clerk charges $15 per page to record and $15 to file the return (32 V.S.A. § 1671(a)(6)).

  • The tax reaches deeds and LLC interests. It applies to "the transfer by deed of title to property located in this State, or a transfer or acquisition of a controlling interest in any person with title to property," and a controlling interest in an LLC is 50 percent or more of its capital, profits or beneficial interest (32 V.S.A. §§ 9601(12)(B), 9602). The transferee owes it unless the parties agree otherwise, within 30 days of closing (§§ 9604, 9605(a)). The Department of Taxes says a clerk can't record a deed without a completed return, filed through myVTax or on paper.
  • The rates depend on use. The general rate is 1.25 percent plus a 0.22 percent clean water surcharge, 1.47 percent in all; the lower principal-residence rate is for the transferee's own home, not an LLC (§§ 9602, 9602a). A residential property fit for year-round living that the buyer won't use as a long-term rental requiring a Landlord Certificate pays 3.4 percent plus the surcharge, 3.62 percent, and the Department says a short-term rental is in the higher group (§ 9602(4); Department of Taxes). On a $400,000 value that is $5,880 versus $14,480 (arithmetic on the rates). The Department treats buildings of five or more units as commercial at the general rate.
  • A long-term rental has to be real. The property must be occupied as a long-term rental within one year of closing, with a Landlord Certificate filed for each year it is rented. The Commissioner can assess the higher rate if there is no bona fide landlord-tenant relationship, and may consider whether the transferee is "an entity with a business purpose other than the avoidance of property transfer tax" (§ 9602(5)). The Department says a company created solely for the transaction to avoid the higher rate puts that relationship in question.
  • A deed to your own LLC may be exempt, but you must claim it. The law exempts "Transfers to effectuate a mere change of identity or form of ownership or organization where there is no change in beneficial ownership," and a transfer to an LLC at its formation if no gain or loss is recognized under the Internal Revenue Code, unless the Commissioner finds that a major purpose is to avoid the tax (§ 9603(6), (24)). Even an exempt transfer needs the return, with the exemption number entered on Line E1 (codes 06 and 15 in the form instructions), and "Failure to enter a valid exemption number commonly results in the Transferee receiving a bill" (Form PTT-172 Instructions). A taxable deed is taxed on the full consideration, including liens that stay on the property, or on fair market value for a gift or nominal consideration (§ 9601(6)).
  • Selling the LLC later can trigger the tax. Transferring or acquiring a controlling interest, 50 percent or more, is itself a "transfer" the tax reaches, valued at the property's fair market value apportioned to the interest, unless a deed of the property between the same parties would be exempt (§ 9603(26)). The return goes to the Department within 30 days on Form PTT-182 (§§ 9601(5), (6)(A)(iii), 9606(a)(2)).
  • Land gains tax is a separate form. The Department describes it as a tax on gain from selling Vermont land the seller purchased and subdivided fewer than six years earlier. The return's Line E3 lets a seller claim an exemption, including land held six years or longer and a transfer without consideration, and otherwise a seller of land held under six years files Form LGT-178 within 30 days even if no tax is due (Department of Taxes; Form PTT-172 Instructions).

Have a Vermont attorney prepare the deed and the return. After it records, give each tenant actual notice of the new landlord's name and address and that the security deposit has been transferred (9 V.S.A. § 4461(f)). For a pre-1978 rental, the state lead law says a transferee of title must "disclose this transfer to the Department" (18 V.S.A. § 1767(e)); ask the Health Department's lead program how. Update leases, rent payment instructions and insurance, and re-register with the city in the LLC's name.

Check the mortgage before you transfer

Federal law lets a lender enforce a due-on-sale clause, and a transfer to an LLC isn't one of the exceptions for 1–4 unit homes (12 U.S.C. § 1701j-3(d)). Fannie Mae allows a transfer to an LLC the borrower controls for loans it acquired on or after June 1, 2016 (Fannie Mae Servicing Guide D1-4.1-02). Ask your servicer in writing.

Insurance and taxes

Tell your insurer before title moves. Winooski won't license a short-term rental without proof of insurance that expressly names short-term rental use, and the state's information packet for operators stresses reviewing property and liability coverage with your insurer (Winooski Mun. Code § 17.13; 18 V.S.A. § 4468(a)). For federal income tax, a single-member LLC is disregarded unless it elects corporate treatment, and an LLC with two or more members is a partnership by default (IRS).

  • Vermont entity tax. The Department of Taxes says the business entity income tax applies to S corporations, partnerships and LLCs "that elect to be taxed as partnerships or S-Corporations," with a minimum tax of $250 generally due. Its page doesn't address a disregarded single-member LLC, so ask your CPA.
  • Landlord Certificate. It is due January 31 for each rented property (32 V.S.A. § 6069). The Department says that if a buyer who claimed the lower transfer tax rate for a long-term rental doesn't file it, the Department can require the 3.4 percent rate.
  • Property tax. All property is nonhomestead unless declared a homestead, and property leased more than 182 days a year or used exclusively for commercial, including rental, purposes is nonhomestead (Department of Taxes, Homestead Declaration).
  • Short-term rental income. Hosts report it on their Vermont personal income tax return, even when a platform collects the rooms tax (Department of Taxes).

Keeping each LLC in good standing

  • File the annual report ($45) within three months after the fiscal year ends (11 V.S.A. § 4033(c)). The articles of an LLC that fails to file "shall terminate," and reinstatement takes the missed report or reports with their fees plus the $35 reinstatement fee for each year missed, effective back to the termination date (§ 4034(a), (b)).
  • A terminated LLC can lose its name after five years, and a court case against it is subject to dismissal unless it is reinstated. Termination doesn't alter members' or managers' limited liability status (§ 4034(c), (d)).
  • Keep the designated office and agent current; a change costs $35 (§§ 4008, 4012(a)(9)).
  • Renew city registrations on their own clocks: Burlington and Winooski by April 1, Barre by July 1.
  • File the Landlord Certificate by January 31 and, for short-term rentals, the rooms tax return.
  • Don't sell or give away 50 percent or more of an LLC without checking the transfer tax first.

Before you file or transfer a property

  • Attorney: the deed, the exemption claim on the return, short-term rental rules, and the Chittenden County agent requirement if you live elsewhere
  • Servicer: is the transfer allowed?
  • Insurance agent: named insured, short-term rental coverage
  • CPA: federal classification, the Vermont entity tax, rooms tax and the Landlord Certificate
  • City: rental registry and inspection, in the LLC's name once the deed records
  • Calendar: the annual report from the fiscal year end; January 31 certificate; April 1 and July 1 city registrations

Form it with Corpus

Corpus prepares and files your Articles of Organization and includes the first year of registered-agent service. The Vermont page shows the current price. Corpus isn't a law firm: the deed, the transfer tax return, the loan, taxes and city registrations are separate steps.

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Sources

Last checked 2026-10-25. Corpus is not a law firm and does not provide legal or tax advice.