With a new state budget, there has been a lot of talk about what will happen for those buying and selling real estate in Connecticut. The biggest change in residential real estate is the new mansion tax. Beginning July 1, 2020, a mansion tax will be applied to residential sales over $2.5 million. Not all of the details have been released yet, but here is what we do know.
In Connecticut, anyone who sells a residential property pays State and Municipal conveyance taxes. Currently, the state conveyance tax is 0.75% for properties sold for less than $800,000 and 1.25% for any amount exceeding $800,000. For most Connecticut towns, the Municipal tax is 0.25%, while 18 municipalities have a rate of 0.5% (see the list of towns here).
New Mansion Tax
The new mansion tax will raise the seller’s conveyance tax from 1.25% to 2.25% for any sale amount that exceeds $2.5 million. For sellers who remain in Connecticut, the mansion tax increase will be returned as a tax credit. Those that leave the state will not receive the tax credit.
As we learn more about the new mansion tax in Connecticut, we will share that information with you. In the meantime, let us know what questions you have.