Who pays the Connecticut real estate conveyance taxes

The short answer is the seller. The useful answer has a qualifier on it, because Connecticut has exceptions and one of them shifts part of the bill.

The general rule

In most Connecticut residential sales, the seller/transferor pays the Connecticut real estate conveyance taxes, unless an exemption, special rule, or negotiated contract term applies.

That sentence is worth reading twice, because every clause in it is doing work.

Why “in most sales” and not “always”

Three things can change the answer.

Exemptions. The Department of Revenue Services lists conveyances that are exempt from the tax altogether. If a transfer falls into one of those categories, nobody pays it.

A special rule. Connecticut has a rule for conveyances in mobile manufactured home parks that can make the buyer liable for the municipal portion and part of the state portion. It is narrow, and it is the clearest case where the usual answer is simply wrong.

The contract. Who pays a closing cost is ultimately a term of the deal. The standard form contracts in Connecticut put the conveyance taxes on the seller, but a contract can say something else, and parties do negotiate it.

Why the seller, in the ordinary case

Two reasons, and they point the same way.

The filing mechanics assume it. DRS Form OP-236 is the conveyance tax return, and the grantor — the seller — files it and pays the tax when the deed is recorded. The form is built around the seller being the payer.

The form contracts say so. Both the Fairfield County Bar and Greater Danbury form purchase agreements assign the conveyance taxes to the seller. Those forms are what most Connecticut residential deals are papered on, so most deals inherit that allocation without anybody negotiating it.

What it actually costs

Two taxes, not one. The state tax and the municipal tax are calculated separately and then added.

For a residential dwelling, the state tax is marginal: 0.75% on the first $800,000, 1.25% from there to $2,500,000, and 2.25% above that. The municipal tax is 0.25% in most towns, 0.50% in sixteen of them, and a stepped rate in Stamford.

As a rough planning figure, the two together come to about 1% of the sale price on a typical residential sale. Run the actual number on the conveyance tax calculator.

If you are the seller

Budget for it early. It is not a fee you can shop, it is not negotiable with the town, and it comes out of your proceeds at the closing table. On a $450,000 sale in a base-rate town, that is $4,500 before anything else.

If you are the buyer

You almost certainly are not paying it. If a settlement statement shows a conveyance tax on your side, ask why before the closing rather than at it. There are legitimate reasons it can land there, and there are also mistakes.