Vermont Act 250 Requires Permits for Large Developments

Vermont's Act 250, a 1970 environmental review law with no national equivalent, applies to developments over 10 acres or 10 or more housing units. Most candidates have never heard of it before sitting for the exam, which is why it accounts for a disproportionate share of missed points on the Vermont state portion.

The VREC regulates real estate licensing in Vermont. The PSI exam covers state specific questions and 80 national questions. You need 70% to pass. Three topics account for most of the state-portion difficulty: the Act 250 permit trigger and its 10 criteria, Vermont's multi-tier property transfer tax, and the state's two-stage lead paint disclosure process. I know, I know. Another state with a completely custom land use framework. But this one actually matters on the exam.

Act 250 (Land Use)

Act 250 is Vermont's unique environmental review law. No other state runs every large development through a 10-criteria permit process, and the exam tests both the trigger thresholds and what each of the 10 criteria covers.

Vermont's 1970 environmental review law requires permits for any development over 10 acres or 10+ housing units, evaluated against 10 environmental criteria, the most distinctive land use regulation in the country.

The PSI exam tests the two trigger thresholds separately: the 10-acre threshold applies to physical land disturbance and the 10-unit threshold applies to residential development. Know that below-threshold projects don't go through Act 250 but may still require permits under local zoning. The exam distinguishes these two regulatory systems. Act 250 isn't just a permit requirement. It's a 10-criteria environmental review that no other state replicates. Know both the trigger and what the 10 criteria actually evaluate.

Property Transfer Tax

Vermont's property transfer tax uses three separate rate tiers that change based on both the purchase price and whether the property is a principal residence. Candidates who apply a single flat rate to every calculation will fail every tax question on this exam.

Vermont's tiered tax charges 0.5% on the first $200,000 for principal residences and 1.47% above that, but jumps to 3.62% for non-principal residences, the math requires calculating across multiple rate tiers.

The PSI exam will present a sale price and ask you to calculate the transfer tax owed. Know the $200,000 threshold for principal residences, the 0.5% rate below it, the 1.47% rate above it, and the flat 3.62% rate for non-principal residences. A miscalculation that applies the wrong rate to the wrong tier will produce a completely different answer from the correct one.

The VREC tests these rate tiers because Vermont's transfer tax structure is more complex than most states, and because the principal-residence versus non-principal distinction is not tested on national prep materials at all. Why did the Vermont seller pay more transfer tax than expected? Because their vacation cabin doesn't qualify as a principal residence. One question, three rate tiers. Know which one applies before you start calculating.

Lead Paint Disclosures

Vermont's lead paint disclosure process has two required stages (Part I before the purchase agreement and Part II at closing), and candidates who only know the federal 10-day inspection rule will fail the questions that test the Vermont-specific sequencing.

Vermont layers state specific requirements on top of federal law, requiring both a Part I disclosure form before the purchase agreement and a Part II at closing, students who only study the federal 10 day inspection miss Vermont's two-stage process.

Lead paint disclosure requirements in New England follow federal rules but add state-level requirements. Maine requires disclosure and testing in certain rental situations, and Massachusetts has the most detailed lead paint compliance law in the region. Vermont's disclosure rules are narrower than Massachusetts's but broader than the federal standard alone.

Know what each Vermont lead paint form must contain, when each must be delivered, and what constitutes a valid buyer acknowledgment at each stage. The exam presents scenarios where the Part I form was delivered but Part II was skipped. Know the consequence under Vermont law specifically.

Vermont's lead paint rules apply to housing built before 1978, the same federal trigger, but Vermont's two-stage process and specific form requirements go beyond what federal law mandates. The exam tests the Vermont additions, not just the federal baseline.