A Realtors’ Day special: Committee schedules vote on home sale tax
The 600 Realtors who came to the State Capitol Wednesday couldn’t help but feel like they were being sucker punched when they heard legislators were moving full speed ahead to extend a tax on real estate sales.
“They’re picking on us,” said Barry Rosa, vice president of the Connecticut Association of Realtors. “They are singling us out with this tax.”
Call it bad timing, but the committee responsible for acting on the real estate conveyance tax was scheduled to vote to continue the levy on “Realtors at the Capitol” day.
That vote was ultimately delayed until today, but Democratic committee leaders said they are confident it will pass.
The tax was set to expire July 1, a move that the Connecticut Conference of Municipalities says would mean an estimated $43 million less in revenue the coming year to local municipalities.
“The municipalities are always informing us how desperate they are and now isn’t the time to cut their funding sources,” said Sen. Eileen M. Daily, co-chairman of the committee.
Continuing the tax has bi-partisan support on the committee if homes in foreclosure and those with a larger mortgage than the value of their home are exempt from the tax, said Rep. Vincent J. Candelora, the ranking House Republican on the committee.
“It may be unpopular, but towns have built it into their budget and I don’t see the tax as an impediment to sales,” the North Branford Republican said. “If this goes away it will translate to higher property taxes.”
But Realtors told legislators the tax is too burdensome on people whose homes are foreclosed or who owe more than their homes are worth.
“You are talking about taxing people who are already drowning. How do you justify that?” said Linda Cappello, a Realtor in Norwalk for Cappello Realty Group.
In the past year, there were 757 homes sold by realtors for less than remained on the mortgage, said Mark Foreman, of Cornerstone Capital Mortgage & Real Estate Services. The Connecticut Statewide Multiple Listing Service, where Foreman draws his numbers, covers about 70 percent of the state.
For foreclosure figures, RealtyTrac Inc. reports there were nearly 2,300 foreclosure filings in the state last month, compared with about 2,200 in January.
A bill has been voted favorably to the finance committee by the Banks Committee would exempt foreclosed properties and those whose mortgage exceeds the selling price from the tax. CCM opposes the bill, saying it would take away $10 million next year from municipalities.
Rep. Cameron C. Staples, co-chairman of the finance committee, said he has not yet looked at the bill, and his committee will first deal with how to close the state’s huge budget hole before considering that bill.
“Hopefully we will get to it,” he said.
Sign up for CT Mirror's free daily news summary.
Free to Read. Not Free to Produce.
The Connecticut Mirror is a nonprofit newsroom. 90% of our revenue comes from people like you. If you value our reporting please consider making a donation. You'll enjoy reading CT Mirror even more knowing you helped make it happen.YES, I'LL DONATE TODAY