Connecticut conveyance tax, explained
It appears on your settlement statement as a four-figure number, nobody mentions it until closing, and most sellers have never heard of it before they sell. Here is what it is and what you will pay.
The basics
Connecticut charges a tax when real property changes hands. The seller pays it. It comes in two parts — one to the state, one to the town — and both are calculated on the sale price.
The state portion
For residential property, the state rate is tiered:
0.75% on the first $800,000 of the sale price
1.25% on the portion above $800,000
Higher-value residential sales carry an additional tier on the portion above $2.5 million. Unimproved land and most non-residential property are taxed at a flat rate rather than the residential tiers.
The tiers apply to portions, not to the whole price. A $900,000 sale is taxed at 0.75% on the first $800,000 and 1.25% on the remaining $100,000 — not at 1.25% on all of it.
The municipal portion
Most Connecticut towns charge 0.25%.
A limited number of municipalities are statutorily authorized to charge more — these are generally towns that have qualified for targeted investment or enterprise-zone designation. If your town is one of them, your attorney will know.
What it actually costs
Sale price | State | Town (0.25%) | Total |
|---|---|---|---|
$250,000 | $1,875 | $625 | $2,500 |
$350,000 | $2,625 | $875 | $3,500 |
$400,000 | $3,000 | $1,000 | $4,000 |
$550,000 | $4,125 | $1,375 | $5,500 |
$800,000 | $6,000 | $2,000 | $8,000 |
$900,000 | $7,250 | $2,250 | $9,500 |
At a 0.25% municipal rate, the all-in cost is 1% of the sale price up to $800,000. That is a useful shortcut for planning.
When and how it gets paid
At closing. Your attorney prepares the conveyance tax returns — one state, one municipal — and the tax is paid from your proceeds as part of the settlement. You will not write a separate cheque.
The deed cannot be recorded without the returns and payment, which is why this never gets overlooked.
Exemptions
There are statutory exemptions. Some of the ones that come up in residential practice: certain transfers between spouses, transfers to or from certain governmental entities, deeds in lieu of foreclosure in defined circumstances, and some transfers where no consideration passes.
There are also provisions relevant to sellers in hardship — including circumstances involving a principal residence sold at a loss, and properties in certain distressed situations.
Whether any of these apply to you is a question for your attorney, not for a blog post. But it is worth asking rather than assuming.
Why it matters before you list, not at closing
Because it is roughly 1% of your sale price, and sellers who have not accounted for it find a surprise on their settlement statement at the worst possible moment — usually the same week they are committing to their next purchase.
Put it in your net sheet from the beginning. On a $400,000 sale it sits alongside roughly $750 to $1,500 in attorney fees, your listing commission, whatever you agree on for buyer-agent compensation, and any concessions.
The one line you can actually move
Conveyance tax is fixed. Attorney fees barely move. Prorations are what they are.
The listing commission is the one number on the page that is genuinely negotiable — which is why it deserves more attention than it usually gets. We list for 1% plus a $400 transaction fee. On a $400,000 sale that is $4,400 on the listing side, against $10,000 at a traditional 2.5%.
Buyer-agent compensation is separate from that figure and negotiable in every transaction.
If you want a net sheet for your property with every line filled in — conveyance tax included — we will build one at no cost.
Zack DeCaro is a licensed real estate broker in Connecticut and Massachusetts with Property Works New England in Rocky Hill. Rates and exemptions are summarised here for general information and can change; confirm your specific situation with your attorney or tax advisor.
