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June 22, 2010

Senate Approves Extension Of Conveyance Tax; Foreclosed Homes Exempted From Conveyance Tax For First Time
By: Christopher Keating
Reprinted from The Hartford Courant

Cash-strapped homeowners who are forced to sell their homes would gain some relief under a bill approved Monday by the state Senate.

Homeowners who are losing their homes to foreclosure will no longer be forced to pay the municipal portion of the conveyance tax. Currently, the municipal portion amounts to $420 on a $300,000 home.

The exemption was sought by the state's Realtors in a radio commercial that played in recent days and asked listeners to call their legislators in order to pass the exemption.

The foreclosure provision was part of a larger bill that extended the municipal portion of the state's tax on real estate transfers for one year.

Without the extension, the portion of the tax that is directed to cities and towns would expire as of July 1. The issue had prompted a battle over the past seven years between real estate agents and the Connecticut Conference of Municipalities, which represents most cities and towns. CCM strongly favors the tax because it generates about $25 million annually for cities and towns.

The Senate voted, 32 to 4, before 3 p.m. for the one-year extension. Four Republicans - Senators Dan Debicella of Shelton, L. Scott Frantz of Greenwich, Toni Boucher of Wilton, and Anthony Guglielmo of Stafford Springs - voted against the measure.

"People have seen the prices of their homes drop 10, 20, 30 percent since they purchased them, and now we're going to be hitting them with an additional tax,'' said Debicella, who is running for Congress in the Fourth Congressional District against Democratic incumbent Jim Himes. "I cannot do this to the homeowners of Connecticut.''

Guglielmo said the leaders of the 13 towns that he represents have worked hard to control spending.

"I think it's a very unfair tax - the conveyance tax,'' Guglielmo said on the Senate floor. "Most people don't expect it when they go to a closing. ... Then we whack them with a pretty heavy burden.''

The issue was debated in a special session Monday because the state Senate failed to vote on the matter during the final, hectic minutes of the regular legislative session that ended in early May. The state House of Representatives had already passed the bill, and many lawmakers assumed there would be enough time for a vote in the Senate. Republican Gov. M. Jodi Rell has pledged to sign the extension.

Senate President Pro Tem Donald Williams said the legislature had taken important action Monday regarding the foreclosure crisis in Connecticut.

"The effects of a foreclosure extend beyond the homeowner and can impact property values and public safety throughout the neighborhood," Williams said in a statement. "No part of Connecticut has been hit harder than Windham County and that needs to change. Our bipartisan jobs bill will make a difference and so will the legislation we passed today. These measures are another weapon in the fight against the foreclosure crisis in Connecticut."

Nicholle Dagata of the Connecticut Association of Realtors said, "On behalf of homeowners across the state who are struggling to make ends meet, we thank the state House and Senate for doing the right thing and providing relief from the real estate conveyance tax for homeowners selling at a loss and in foreclosure. The Realtors understand that these are difficult economic times, and we applaud the General Assembly for balancing the needs of the municipalities that collect the tax with the homeowners across the state who are most vulnerable. The temporary tax increases have been extended for one more year and we are happy to see they will sunset next July."



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