Who Gets the House in a Vermont Divorce?

With Vermont's median home price exceeding $379,000, the family home is usually the largest single asset in a divorce. How it gets divided depends on your custody arrangement, each spouse's ability to refinance, and whether keeping the house actually makes financial sense.

Vermont doesn't automatically award the home to either spouse. Under the all-property doctrine (15 V.S.A. § 751), the court considers the home alongside every other asset to reach an equitable overall distribution.

The Four Options for the Family Home

1. Equity Buyout

One spouse keeps the house and pays the other their share of the equity. This usually requires refinancing the existing joint mortgage into the keeping spouse's name alone.

How the math works: If the home appraises at $400,000 with a $250,000 mortgage, the equity is $150,000. If the court awards a 50/50 equity split, the keeping spouse owes $75,000 to the departing spouse — often funded through the refinance proceeds.

The keeping spouse must qualify for the refinance independently. If they can't, this option falls apart regardless of what either party wants.

2. Sell and Split the Equity

The home goes on the market, the mortgage and selling costs are paid from the proceeds, and the remaining equity is divided according to the court order or settlement agreement.

This is the cleanest option when neither spouse can afford the mortgage alone, or when the equity needs to be liquid for other parts of the settlement (paying off debts, funding retirement splits, etc.).

3. Deferred Sale

Under 15 V.S.A. § 751(b)(9), the court can allow the custodial parent to remain in the home until a triggering event — typically the youngest child turning 18 or graduating high school.

The divorce decree must specify who pays the mortgage, property taxes, insurance, and maintenance during the deferral period, and how the proceeds get divided when the house eventually sells. Without these specifics, deferred sales breed conflict.

4. Post-Divorce Co-Ownership

Both spouses retain ownership with a contractual timeline for a future buyout or sale. This is rare in contested cases because it requires ongoing financial cooperation between people who couldn't agree on a settlement.

Mortgage Responsibility During the Divorce

Until the court issues a final order, both spouses remain liable for the joint mortgage regardless of who's living in the house. Missing payments damages both credit scores.

If you're the spouse who moved out, you still owe the mortgage. If you're the spouse staying, don't assume the other party will keep paying. Address this in your temporary orders.

Real Estate Transfer Mechanics

Vermont married couples typically hold property as "tenants by the entirety." When the divorce decree becomes absolute (after the 90-day nisi period), this automatically converts to a "tenancy in common" — each party holds an undivided half-interest.

To complete the transfer to one spouse:

• Quitclaim deed: The departing spouse signs a quitclaim deed releasing their interest.
• Property Transfer Tax Return (Form PTT-172): Must be filed with the town clerk. Transfers pursuant to a divorce decree are exempt from Vermont's 1.25% property transfer tax — use exemption code 05 or 19.
• Recording fee: Currently $15 per page at the town clerk's office.

The Land Gains Tax Trap

If the home includes land sold within six years, Vermont's land gains tax could apply. However, the spouse retaining the property can "tack" the entire joint ownership period from the marriage onto their individual holding period under 32 V.S.A. § 10003. If you were married 8 years and held the property throughout, you clear the 6-year threshold.

Making the Right Decision

The house is emotional, but the math has to work. A home you can't afford to maintain, heat (Vermont heating costs run $2,500–$4,000 annually for fuel oil or propane), insure, and eventually sell is a financial anchor, not a win.

The Vermont Divorce Financial Split Guide includes a Home Equity Buyout Calculator worksheet that helps you model each scenario — buyout, sale, or deferral — with your actual numbers before you commit to a position.

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