For example, the taxes discussed above are state taxes. The rising conveyance tax on high-end residential sales in Connecticut represents one of many complexities in the transfer of property, both residential and commercial. Of course, the seller needs to remember to take advantage of the income tax give-back provision and have the necessary documentation in place. All of the tax paid at the 2.25 percent level can now be offset, essentially creating a conveyance tax cap at $2.5 million in value. Sellers who effectively take advantage of the credits will actually be better off than they would before the change in law. On that $4 million sale, for example, the seller would claim a deduction of $11,250 each year. Those who sell high-end homes but remain residents of the state will get back the extra conveyance tax they paid as future income tax credits.īeginning in 2023, the seller of a home whose value exceeded $2.5 million will be able to claim 1/3 of the higher tax as a deduction each year over three years. The increase in the conveyance tax for luxury residential properties is targeted at sellers who are leaving Connecticut.
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