CT Real Estate Barbara Altieri : July 2011

CT real estate REALTOR Barbara Altieri shares market and general information on towns in Fairfield County and New Haven County.

Selling Your Home in CT? How to Calculate the CT Conveyance Tax

Selling Your Home in CT?  How to Calculate the CT Conveyance Tax

The other day a prospective seller asked me to go over his expense sheet to get a ball park idea of what he might net if he sold his home in Shelton, CT.  When I looked at it, what was right at the top as the number one cost? Yes, realtor commission. Guess that sticks out in a seller’s mind more than anything.

THEN he had his mortgage and HELOC balances.  I looked down the page and did NOT see conveyance taxes.  In the state of CT, when a home is sold, the seller must pay a conveyance tax based on the selling price at closing to the state as well as the municipality.

On July 1, 2011, the state portion of the tax went up.  This seller, having forgotten to include CT conveyance taxes in his net sheet, missed calculating a bit of a hit to his bottom line.

Unfortunately, in CT sellers must pay this tax.  Just another necessary evil.  So, how much is it?

There are two parts and this is how it breaks down.

Local Conveyance Tax
(typically 1/4 of one percent (0.25) of the selling price.
Calculate: .0025 x selling price.


State CT Conveyance Tax
(3/4 of one percent (0.75) of the purchase price of the property up to $800,000.00, and 1.25 percent (0.125) for all amounts over $800,000.00 (dubbed the ‘mansion tax’)
Calculate: .0075 x selling price.

Let’s take this seller’s house in Shelton as an example:

Selling Price        $350,000        
Local Tax            $        875  ($350,000 x .0025)
State Tax             $     2,625  ($350,000 x  .0075)

Conveyance Tax Grand Total To Be Paid At Closing $875 + $2,625 = $3,500

For properties sold under $800,000, the easiest way to estimate the conveyance tax is to just calculate 1% of the selling price.  (.25% + .75% = 1%)

He asked me if there were any exemptions to this tax. Well, yes, there are some; but not for typical equity sales.

Calculate CT Conveyance TaxPopular exemptions include short sales and deed-in-lieu foreclosures which apply to conveyances of a principal residence, transfers between spouses, companies that acquire property from an employee pursuant to an employee relocation plan and others.    See CT Senate Bill No. 501 which outlines all exemptions in full detail.  Please consult an attorney to see if you qualify.

Note that Fairfield County cities of Bridgeport, Norwalk, and Stamford have adopted a higher tax rate.  Along with the other towns below, they are targeted investment communities each having a manufacturing plant that qualifies for enterprise zone benefits.  

So their municipal tax rate is .25% plus an additional tax of up to . 25%  for choosing  to impose the increased rate. Thus, overall, the municipal tax rate in CT can range from 0.25% to .5%, depending on where the property is located.

In addition to Fairfield County’s Bridgeport, Norwalk, and Stamford, the communities charging an additional .25% tax rate bringing the total municipal tax to .5% are:  Bloomfield, Bridgeport, Bristol, East Hartford, Groton, Hamden, Hartford, Meriden, Middletown, New Britain, New Haven, New London, Norwalk, Norwich, Southington, Stamford, Waterbury, and Windham.

So if you’re thinking of selling and trying to estimate your net proceeds, don’t forget to calculate the CT conveyance tax --- even though you’d LIKE to forget about it!


Selling Your Home in CT?  How to Calculate the CT Conveyance Tax








  

 

Barbara Altieri, REALTOR®
Listing and Buyer's Agent
Certified Short Sales Specialist
RealtyQuest Real Estate Sales and Services Team

Kinard Realty Group
30 Huntington Street, Shelton CT 06484
Office -- 203.929.1752
Cell -- 203.520.6930
Email -- barbara.altieri@realtyquest.com

 

 

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Comment balloon 18 commentsBarbara Altieri • July 28 2011 11:43AM
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