Since 2003, home sellers in Connecticut have been paying an increased home sale conveyance tax. This tax increase, imposed only on home sellers, was created as a temporary - two year - tax to supplement state and local coffers during the 2003 state budget crisis. In 2005, this tax was extended for another two years.
Currently, this tax increase is set to expire on June 30, 2007. This tax increase, typically paid by the seller in a home sale transaction, costs the seller an additional $140 for each $100,000 of the sales price. (For a $500,000 home sale, the seller would pay an additional $700, on top of the standard state conveyance tax).
Connecticut's town mayors and selectmen are arguing for another extension on this tax, as they stand to lose revenue if the tax expires. (This additional tax goes to the town, to replace funds that the state is no longer providing to the town).
Opponents of the tax argue that home owners are already paying property taxes to the town, and should not continue to be burdened with this additional - and planned temporary - tax when they sell their home. Local mayors and selectmen claim that if the conveyance tax is allowed to expire, they would be forced to raise property taxes and reduce or eliminate some town services.
While we can all agree that the towns do need the financial resources to provide town services, the question is this: Why has the state government, given the current state budget surplus, not restored local funding to the 2003 levels?
More information on this Connecticut home seller conveyance tax can be viewed at www.InvisibleTax.com.
Prudential Connecticut Realty
Connecticut Real Estate and Homes for Sale