Connecticut state conveyance tax (0.75% / 1.25%) plus municipal tax (0.25–0.5%) explained. Why sellers in luxury towns sometimes owe over $20,000 just in conveyance.
What conveyance tax is
Connecticut conveyance tax is a transfer tax paid at closing when real property changes hands. Unlike states where this is split or paid by the buyer, Connecticut conveyance is paid 100% by the seller.
There are two components: state conveyance and municipal conveyance. Both must be paid at closing or the transfer cannot be recorded.
State conveyance tax — the tiered rate
Connecticut state conveyance tax uses a graduated rate:
- 0.75% on the portion of the sale price up to $800,000
- 1.25% on the portion from $800,000 to $2,500,000
- 2.25% on the portion above $2,500,000
Municipal conveyance tax
Each Connecticut municipality may also impose a municipal conveyance tax at 0.25% — and 18 designated 'targeted investment communities' are authorized to charge up to 0.5%. Common municipalities at the 0.5% rate include New Haven, Bridgeport, Hartford, New Britain, Waterbury, and several others.
The municipal tax applies to the entire sale price, not the tiered state structure.
A worked example
Suppose you're selling a Greenwich home for $1,400,000. The conveyance breakdown:
- State tax on first $800K: $800,000 × 0.75% = $6,000
- State tax on next $600K (from $800K to $1.4M): $600,000 × 1.25% = $7,500
- Municipal tax (Greenwich is 0.25%): $1,400,000 × 0.25% = $3,500
- Total conveyance tax: $17,000 — paid by the seller at closing
Edge cases and exemptions
A handful of transactions are exempt or partially exempt:
- Transfers between spouses (e.g., during divorce)
- Transfers to/from a revocable trust where ownership is unchanged
- Foreclosure sales (different rules apply)
- Sales below $2,000