Connecticut’s Conveyance Tax May Be Extended for Two Years

House Bill 5885 - Is Connecticut’s Conveyance Tax Increase Temporary?

The temporary fix to Connecticut’s financial problems may continue to be supplemented by the increased conveyance tax for both the State and local municipalities. A conveyance tax is imposed and collected based upon the sales price of the real property being sold. In Connecticut the conveyance tax is customarily paid by the seller at the time of the sale.

The increase in the conveyance tax was supposed to expire (sunset) July 1, 2007. A sunset gives lawmakers a chance to review laws and then after its review decide to continue them or not. Apparently, this increase shall not expire but continue for at least two more years at this rate.

If you are selling your home at a loss you may have to bring money to the closing table to pay this conveyance tax in addition to the other fees associated with the closing, including real estate commissions, attorneys fees etc. Conversely, a bank that acquires a property through the foreclosure process does not pay a conveyance tax on that foreclosed property. A conveyance tax is bourn only by a home seller regardless of the length of time the seller has owned the home.

The tax is calculated on the total sale price, not the equity or the profit that the seller makes. Every day at the closing table you can feel the stress that the homeowner, often bringing money to the closing table to avoid foreclosure or a high interest rate usually unexpected with that variable rate mortgage. Seniors in this state are being affected who live on a fixed income and need all of the equity that they have built over years of home ownership when it's time to sell their property.

Your home is one of your greatest investments and you don't want to see your equity going to a state government that continues to increase our taxes. Sunset the conveyance tax and hold the politicians to their word of a temporary increase and not a permanent increase disguised by temporary renewals of the tax.