Connecticut’s Conveyance Tax Explained

 

Formerly the estate of "timber tycoon" John Rudy...really? "Timber tycoon"?

Formerly the estate of “timber tycoon” John Rudey, the sale of this 50.6 -acre property produced a total conveyance tax of $1,796,000.

The occasion of the sale of 499 Indian Field Road, “Copper Beech Farm” for $120,000,000 and it’s attendant conveyance tax* of $1,796,000 provides us with an opportunity to show how this (insidious, deliberately confusing, so-called) tax works…

Here is the state of CT’s real estate conveyance tax, in it’s two parts:

State:  .75% of the first $800,000 and 1.25% on amounts above $800,000.

Local:  .250% of the total sales price.

So in the case of this landmark $120,000,000 sale, you calculate thusly….

For the state, you take that first $800,000 and multiply by .0075 to get $6,000. For the balance ($119,200,000), you multiply by .0125 to get $1,490,000. Total for the state, therefore is $6,000 plus $1,490,000 or $1,496,000.

For the Town’s take, you multiply the entire total of $120,000,000 by .00250 to get $300,000.

OTHER EXAMPLES

Sell for $1,000,000:

State gets .0075 of the first $800,0000, which is always $6,000. The $200,000 balance is multiplied by .0125 to get $2,500.

Town gets .0025 times $1,000,000 equaling $2,500.

Total conveyance tax = $11,000.

Sell for $2,000,000:

State = $6,000 + $15,000

Town = $5,000

Total conveyance tax:  $26,000.

Sell for $3,000,000

State = $6,000 + $27,500

Town = $7,500

Total conveyance tax:  $41,000.

And so on…

* In their never-ending quest to drive productive citizens out of Connecticut, Hartford liberals, beginning in 1989, began the steady raising of the conveyance tax every few years. Since it applies to all sales, even in cases where the seller may be losing hundreds of thousands, even millions of dollars, it is more accurately described as a real estate sales penalty. Don’t like it?  Stop voting for liberals!

 

 

 

 

 

9 thoughts on “Connecticut’s Conveyance Tax Explained

  1. BRAVO Gideon! Both a useful post to educate your reader on the effect of conveyance tax and also an excellent barbed projectile to sting the idiots who congregate in Hartford to do their level best to ruin what’s left of this once great state.

    • Anon:
      Ben Franklin famously observed, “Three may keep a secret, if two of them are dead”, to illustrate the difficulty of keeping ANYTHING a secret if it’s known by more than one person. The identity of the buyer(s) of Copper Beech Farm WILL come out, perhaps soon. One thing I’m convinced of, it is NOT “the eccentric Ray Dalio” (as the Greenwich Time refers to him).

  2. Dude, what’s the story on the local RE scene regarding volume? Sales seem to have cooled off the past two months after a decent Jan/Feb. Are there less lookers right now? Are there just a slew of deals under contract, but not closed?

    Somewhat unrelated; here we are 5 to 8 years removed from when many of those $1.7 to $3MM townhouses where built in Gwich proper and the Bruce Park area and builders are still struggling to offload these things. I think they just want too much for this lifestyle and the perception of illiquidity is killing the market. The only cure – lower the price.

    • Cos:
      No, the market’s pretty good, although there are aspects of it that remind me of 2010. For instance, WAY too many rentals, not enough sales. I’ll post statistics comparing last year to this year, later this morning (including condos).

  3. Agreed. But part of the problems is also sellers. Too many flawed homes (low ceilings, small rooms, no expansion potential, no yard, etc want that ’07 price again.

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