Will Connecticut Legislators Help Home Sellers in Trouble by Eliminating Conveyance Tax?

The Real Estate Conveyance Tax. 

The tax that you pay when you sell your house. 

The tax that was raised a few years ago, temporarily, to help solve a budget shortfall but keeps getting renewed. The tax the municipalities are desperate not to lose because it’s easy money and most home sellers forget about it until the closing table.

The median home in CT sells for about $250,000 and the real estate conveyance tax on the median home would be about $2000, more if you live in one of the 18 towns that can charge you an extra .25% or an extra $500. 

With all the talk about rescuing homeowners these days from subprime mortgages, what about rescuing homeowners who are responsible enough to sell their homes before the bank forecloses on them but have to walk away owing the bank and the government money? 

From whom do they need rescuing? Our legislators, of course.

Legislators in Connecticut have been determined to keep the conveyance tax as it stands. 

If you are selling your home for less than you paid for it, which is the case for some sellers today, the government doesn’t just give you a pass.  The conveyance tax is not for the profit you made- it’s on the sales price. You are still expected to pay the conveyance tax to the state and town, even if you don’t have it.

What about all those Realtors making all that commission money?

Leave it to a lobbyist for the Connecticut Council for Municipalities, James Finley, (the very powerful representing group for the 150+ towns in CT) to illustrate the point so eloquently:

“If the Realtors are so concerned, why don’t they lower their 6 percent [commissions]?” Hartford Courant

 Actually Jim, the average real estate commission is less than 6%. 

Realtors are the only party who is expected to reduce their fees.  Attorneys, appraisers, and banks rarely if ever reduce their fees to help out a homeowner.  And the conveyance tax is never reduced. 

And the state and locals realtor boards are the only groups actively involved in trying to get this tax rolled back.

Maybe this time the state will actually care about homeowners and reduce the conveyance tax to it’s original amount.