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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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