State Conveyance Tax Rate

The state conveyance tax is .0075 (.75%) of the sales price up to $800,000.00. Any amount above $800,000 is taxed at .0125 (1.25%). The municipal conveyance tax is 0.0025 (.25%) for most towns. There are 18 eligible municipalities that are permitted to impose a tax of up to 0.005 (.5%).
The 18 towns permitted to maintain higher rates are:

Bloomfield	Bridgeport
Bristol	East Hartford
Groton	New London
Hamden	Hartford
Meriden	Middletown
New Britain	New Haven
Norwalk	Norwich
Southington	Stamford
Waterbury	Windham

Seller Concessions

One of the new realities of the current real estate market is that buyers often ask for concessions, monetary and otherwise, from sellers.  It used to be that they asked for things to be included or fixed, based on the inspection.  Now, they also may ask for the seller to pay some or all of the closing costs.  This is often so that the purchase price is higher, and allows them to qualify for a higher mortgage amount.

We have seen some issues at the closing with these requests.  The sellers don't always seem to realize that the purchase price will be the basis for the conveyance tax, the land records, and the commission.  It's the amount at the top of the sales contract that governs all those amounts.  We, for instance,  have other brokers to pay in almost all cases.  Sometimes it's a referral, sometimes a co-broke, either inside or outside the company.  The commission offered is on the full amount, and we are responsible for it, whether or not the seller made concessions.  While I understand why sellers wouldn't always like that, I don't see the difference between a concession made in cash or at closing from a concession made during inspections or even during negotiations.  It happens, and it isn't our fault.  And we shouldn't have to take the co-broke commission difference out of our pocket.

There are a lot of ways to get upset during the length of a sales transaction.  But, please, don't shoot the messenger.  We're trying to help.

Testifying in Hartford

I went up to the Capitol today, to testify before the Finance Committee about its proposed bill to increase fees and extend the sales tax to professional services of all kinds. CBIA sent me information about the bill, and the CT Association of Realtors added more. My testimony, which was the first from the public attendees, basically tried to give them a flavor of what it's like to be running a small business in CT--or anywhere, I guess--these days, and to let them know that I thought that they should cut their expenses, as I have mine, before talking about increased taxes. The last thing we need, or want, now is more to pay! An extension of the sales tax would mean that every seller, on top of paying the bank, the broker, the adjustments, and the conveyance tax (see, they're already getting their share), would now pay 6% of the commission and 6% of the lawyer's closing fees. Why do they always think it's a good idea to tax people who are selling things, as though they necessarily have extra cash to throw around? And what makes them think that I can pay extra license fees now? Or pay people to collect and remit sales tax? Talk about kicking someone when she's down!

Don't make the mistake of thinking that increased fees and professional taxes and other proposals won't affect you--in the end, they will. Maybe they should take away the House and Senate's free family medical care for life, before they come after the rest of us. We all need to do our share, but the way to go about it is to cut your expenses before you say what you need in extra revenue. And I sure wish I could just ask for more revenue!