Public Act 11-6
I am writing in an attempt to clear up any confusion about the current conveyance taxes in the state of CT. There has been some confusion since the laws changed.
When you sell property in the state of CT you are taxed on both the Municipal and the State Level.
On the Municipal level you will be taxed at a base rate of .25% of the sales price plus up to an additional .25% in 18 “Targeted Investment” municipalities. Towns that are eligible for the additional .25% are Bloomfield, Bridgeport, Bristol, East Hartford, Groton, Hamden, Hartford, Meriden, Middletown, New Britain, New Haven, New London, Norwalk, Norwich, Southington, Stamford, Waterbury, and Windham. Unfortunately all of these towns have elected to embrace the .25% in additional tax.
State tax is .75% of the sales price. Properties selling in excess of $800,000 will be taxed an additional .5% of the amount exceeding $800,000.....or 1.25%
Example 1
For a $350,000 residential property selling in a town with the additional amount, total conveyance would be…
- Town Tax .25% x $350,000 = $875
- Additional Tax .25% x $350,000 = $875
- State Tax .75% x $350,000 = $2,625
- Total Conveyance Tax of $4,375
For a $1,250,000 residential property selling in a town with the additional amount, total conveyance would be…
- Town Tax .25% x $1,250,000 = $3,125
- Additional Tax .25% x $1,250,000 = $3,125
- State Tax .75% x $800,000 = $6,000
- State Tax 1.25% x $450,000 = $5,625
- Total Conveyance Tax of $17,875
Please note that there are various categories of real estate that are exempted from the municipal portion of the conveyance tax. A couple that I felt were worth mentioning are deeds in lieu of foreclosure for a primary residence and any conveyance of a primary residence where the purchase price is less than the mortgage and property taxes due on sale.
Buyers looking to purchase a property that is currently owned by a relocation company or employer? If the resale occurs within six months of the employee conveyance then the Employer will not be required to pay the municipal portion of the tax. (A little leverage when negotiating with Relo ;)
If you are thinking of Buying or Selling anywhere in CT I am happy to speak with you to form a strategy. If you are outside of our area we can help with finding a local reputable agent for you as we are connected to the most trustworthy, adept, and personable agents in the state.
CLICK HERE to set up a time to meet or talk about your goals.
Tim Bray (B.S. Real Estate & Urban Economics -UConn)
860-912-7137 or tbray@seaportre.com
Posted by Tim Bray on
Is the entire amount payable on closing even though the property might be sold on an installment basis, or is the prorata tax payable as the payments are received over the years?
Posted by michael bishko on Friday, July 27th, 2018 at 11:57pmLeave A Comment