NEW CONVEYANCE TAX INCREASE

REMINDER…. CONVEYANCE TAX INCREASE EFFECTIVE 7/1/11
The Connecticut General Assembly adjourned its 2011 Regular Session on Wednesday, June 8. The following material highlights a number of important pieces of legislation that were enacted in the session.

Conveyance Tax

• Public Act 6: Section 102 of this act increases the state's portion of the tax by ¼ of one percent. This increase will go into effect on July 1, 2011, and will be applicable to conveyances occurring on or after that date. The act was signed by the Governor on May 4, 2011.
• Residential property (and vacant land) will thus be taxed at ¾ of one percent (instead of ½ of one percent).
• Residential property that is conveyed for more than $800,000 (the so-called "mansion tax") will be taxed at ¾ of one percent up to that amount, and then at 1 and ¼ of one percent on the excess.
• Nonresidential property that is currently taxed at 1% will instead be taxed at 1 and ¼ of one percent.
• Conveyances to a financial institution of property on which mortgage payments have been delinquent for not less than six months will be taxed at ¾ of one percent, instead of ½ of one percent.
• Section 103 of the bill provides that the revenue attributable to the increase in the state tax rate shall be deposited by the Department of Revenue Services into a municipal revenue sharing account, with funds used for municipal grants.

Note: The legislature did not enact a bill that would have allowed municipalities to impose a "buyer's tax" on the conveyance of real property.

Foreclosures
House Bill 6351: This bill extends the sunset date of the foreclosure mediation program from July 1, 2012 to July 1, 2014. The bill also extends the program to include the owners of property occupied by a religious organization. Other changes made to the mediation program include new restrictions on the making of motions and new documentation requirements.

Other matters covered by the bill include the protections afforded to certain tenants of foreclosed homes; the registration requirements imposed on those who bring foreclosure actions and on those in whom title vests following a foreclosure action; and overtime requirements applicable to certain mortgage loan originators.

Recording Fees
Public Act 48: Section 134 of this act amends Conn. Gen. Stat. § 7-34a to make permanent the ten dollar surcharge on recordings that was first established in 2009. That surcharge was due to expire on July 1, 2011. Revenue raised by the surcharge is to be dedicated to the uses set forth in Conn. Gen. Stat. § 4-66aa, as amended by Section 133 of the bill. The act has not yet been signed by the Governor.