Well, it passed! The increase in Connecticut's Real Estate Conveyance Tax Rate. We knew it was coming. We, the Realtors, fought hard to stop it, and we will continue to do so, but as of July 1, 2011 any seller who is selling their home will have to pay a higher conveyance tax.
What is a conveyance tax? ...it is a tax charged to any property owner who is transferring or conveying their property to another person or entity. It means that the cost to sell your home or property has now increased.
Why you may ask, when real estate has been so hard hit all over the state did Governor Malloy decide to increase the conveyance tax? I suspect the simplest answer is the state needs to close a very large deficit...but then it may be better if you ask him yourself.
There are two seperate conveyance tax in this state: State and Municipal.
There are two exemptions: Homes with foreclosures sales conducted pursuant to a foreclosure by sale conducted by a court committee. And...
Two new exemptions: Homes that transfer with a deed in lieu of foreclosure, and homes that are short sales ( when the gross purchase price is insufficient to pay off mortgages, municipal tax liens, and liens for municipal services.
The state conveyance tax has increased as stated below:
For deeds, instruments, or writings that are currently subject to the state real estate conveyance tax at a rate of 0.5%, the rate increases to 0.75%.
For deeds, instruments, or writings that are currently subject to the state real estate conveyance tax at a rate of 1.0%, the rate increases to a rate of 1.25%
For deeds, instruments or writings conveying residential estates in excess of $800,000, the state real estate conveyance tax rate increased from 0.5% to 0.75% on that portion of the consideration up to and including $800,000 and the state real estate conveyance tax rate increases from 1.0% to 1.25% on the portion of the consideration exceeding $800,000.
The Municipal Real Estate Conveyance Tax remains at the same rate of .25%, unless it is in a "targeted community" which allows the municipality to charge double the rate to 0.5%. Those Eastern Connecticut communities that have adopted the increased tax are: Groton, New London, Norwich, Windham.
If you have any fuerther questions about this tax or the application of it, Call your closing attorney or any Real Estate attorney.