Legislation would exempt foreclosures, short sales from conveyance tax
March 26, 2010 – (RealEstateRama) — The co-chairs of the General Assembly’s Banks Committee—state Senator Bob Duff (D-Norwalk) and Representative Ryan Barry (D-Manchester)—today praised action by the legislature’s Finance, Revenue & Bonding Committee yesterday that will restore an exemption to the state’s real estate conveyance tax on foreclosures by sale, short sales and transfers in lieu of foreclosure.
Language approved by the Banks Committee on March 16 and designed to protect vulnerable borrowers facing financial difficulty was amended in the Finance Committee onto legislation that extends the real estate conveyance tax for an additional two years.
“Individuals and families facing home foreclosure are often at an absolute low point,” said Senator Duff. “We have a mediation program working to help homeowners and lenders come to equitable solutions, but in some cases it’s not enough. What we’ve heard from industry officials is that vulnerable ‘underwater’ borrowers are even more disadvantaged in their ability to negotiate a solution by the added expense of the conveyance tax. Foreclosure affects individual borrowers, but it also has a direct effect on neighboring home values, quality of life, blight and neighborhood crime. This legislation is another step in our efforts to cope with the foreclosure crisis in Connecticut, and I’m glad that the Finance Committee agreed with our effort and chose to move this legislation along in the process.”
Senator Duff also praised Representative Barry for his leadership, as a member of the Finance Committee, in seeing the legislation through.
“Attaching a conveyance charge to someone losing their home to foreclosure is simply salt in the wound,” Representative Barry said. “Exempting foreclosure sales from the real estate conveyance tax will help families that are in dire straits and serves as another layer of assistance beyond our foreclosure mediation program, which has proven so successful.”
Legislation to exempt foreclosures and short sales was approved unanimously in the Banks Committee.
The amended Finance Committee bill—Senate Bill 434, An Act Concerning the Real Estate Conveyance Tax—now moves to the Senate calendar to await further action.
The 2010 regular legislative session adjourns on May 3.
