Conveyance Tax On Buyers.

Yesterday I wrote about my visit to Hartford for Realtor Day At The Capitol, and the first issue that I felt needed to be brought to everyone’s attention, and that those of us in the Real Estate Industry need to come out in opposition of this Legislative session, was House Bill HB 6349, Tax On Professional Services.

The second Bill that I feel everyone needs to aware of, and to strongly oppose is House Bill HB 6397, which has been proposed and defeated the last two years, which would create a new 1% Real Estate Conveyance Tax on Buyers on properties with a sales price over $150,000. This means that here in Connecticut just about all houses would be affected by this new conveyance tax, as well as many Condominiums.

This Bill as well as HB6349 that I wrote about yesterday, flies in the face of the recent stimulus policies passed in Washington. At a time when many Sellers are upside down on their properties, and Buyers are struggling to come up with even a minimum downpayment, this is the wrong direction to take.

If this Bill passed, a Buyer would have to come up with and additional $1,500 for Closing Costs on a property sells for $150,000. Someone might say that they could ask the Seller to give them this amount in Seller Paid Costs, but that is not a good option for many reasons, of which two of them are, the Seller might already be or close to being upside down on their mortgage, and second inflating the selling price by this amount could possibly cause the property to not appraise.

At a time that every effort seems to be to make purchasing a house more affordable, this Bill would be doing the complete opposite. This would be yet another obstacle to efforts to turn the housing market around. On one hand the Federal Government would be providing a $8,000 Tax Credit to First Time Homebuyer, and with the other hand our State Government would be taking away a major chunk of it.

This also would be another form of double taxation on the same property. Sellers are already paying a Conveyance Tax of up to 1% on the Sale of their house, and now the Buyers would also be paying an additional 1% Conveyance Tax on the same property, on the same transaction. This is amazing, where does it stop? We need to be the voice for Buyers and Sellers, who are in most cases clueless that this is going on. This is our Industry and our lively hood, and we have to stand up for it.

When the Conveyance Tax on Sellers was passed, we were told that it would Sunset two years ago, well this is now the third year and it is still here, and Legislators do not have any intention of remove it. This Industry has been taxed enough, time for Local, State, and Federal Governments to do what the rest of us are doing, live within our means, and with what we have.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com