Expect Thetford’s property taxes to go up–again–as households are getting priced out

There are many ways to measure affordability—inflation, wage growth, and spending power among them—but property taxes remain one of the most telling local indicators of how expensive life is. In Thetford, they tell a sobering story.

Property taxes rose by a staggering 19.7% in 2024, driven largely by changes to the state’s education tax formula. For 2025, both municipal and education taxes are expected to climb once again, putting even more strain on residents.

Municipal spending is set to grow by 4.76%, bringing the total Town budget to nearly $3.5 million. This includes $555,096 allocated to outside organizations such as the Library Federation, the Volunteer Fire Department, and other social services. It also includes a new, somewhat controversial social services program to assist Thetford’s most underserved residents. At an initial cost of $25,000, the program, coordinated by Bugbee Senior Center, is designed to provide limited part-time services. While its goals are commendable, its reception among residents has been mixed. To help fund the program, the Trustees of Trust Funds have volunteered to support 50% of the cost through the private Thetford Farm Trust.

To cushion the immediate impact of rising Town spending, the Town plans to use $50,000 from its capital reserves, effectively deferring part of the tax rate increase to future years.

Meanwhile, school spending is expected to rise by over $300,000, bringing the budget to almost $10.5 million—a 3% increase. The district is partially managing this increase by leaving a teacher vacancy unfilled and by allocating $500,000 from its capital reserves to defer some costs to future years. As a result, the total amount to be raised from Thetford property owners for education expenses will actually decrease by $200,000 compared to last year. However, because of Vermont’s complex education tax formula, which takes into account factors beyond local budgets, the education tax rate for Thetford is still expected to rise by over 2.25%.

Thankfully, Vermont’s property tax credit provides some relief. For primary residences (homesteads), the program is designed to reduce the tax burden for households earning under $115,000 annually (adjusted each year). The maximum credit is $8,000, with $2,400 applied toward municipal taxes and $5,600 for education taxes. While this program helps insulate lower- and fixed-income households from steep increases, it doesn’t address the underlying issue of rapidly rising costs.

To better understand the burden on taxpayers, consider Thetford’s estimated median home value, currently around $260,000 (though Zillow reports the average home sale price exceeding $400,000). In 2024, taxes on a $260,000 homestead surpassed $8,000 for the first time, meaning many lower-income households began to face out-of-pocket housing costs for the first time.

For a household earning Thetford’s estimated median income of $72,000, property taxes accounted for 11.7% of their total income in 2024, up from 9.8% in 2021—a 2% increase in percentage points over just four years. This does not include inflation, rising utility costs, or other essentials like groceries, although the property tax credit offers some relief.

If the same household purchased a $260,000 home today with 20% down and a 7% interest rate (a conservative estimate given higher market prices), their monthly mortgage payment, including taxes, would total $2,083—34.7% of their income, well above the 30% threshold considered affordable.

The affordability gap is even starker at current market prices. To afford a $400,000 home in Thetford in 2025, with a 20% down payment and 7% interest, a household would need to earn over $129,000 annually. At that income level, they would not qualify for Vermont’s property tax credit, further exacerbating the financial burden.

Rewinding to 2021, the situation looked significantly different. The average home price in Thetford was closer to $340,000, already reflecting a sharp increase since the pandemic began, and average interest rates were just 3%. At 2021’s combined homestead tax rate, a household would need to earn approximately $76,500 to maintain affordability, spending $1,914 per month on mortgage and property taxes. Today, that figure has jumped by nearly 69%. Put another way, affordability in Thetford has declined by roughly 41% in just four years due to rising property taxes and interest rates.

This rapid shift paints a troubling picture. Thetford is no longer affordable for new residents earning less than $129,000 annually (or more for those unable to make a 20% down payment). Even current residents earning the median household income of $72,000, living in homes valued at $260,000, are now paying taxes that exceed 10% of their gross income. For households earning less than $72,000 or with homestead values above $260,000, the situation is even worse.

Without meaningful change, Thetford risks pricing out its middle- and lower-income residents entirely.