November 19, 2009
HARTFORD —
Losing a property to creditors will get more painful next year: Some homeowners in foreclosure will be hit with a new tax.
Foreclosures sales have been exempt from Connecticut's real estate conveyance tax for years, but the General Assembly is ending that break Jan. 1.
The state is making the change to help close gaps in its budget, and cash-strapped municipalities are eager to get their share of the new revenue, too. But several state lawmakers say they're already dissatisfied with the change. (WHO'S YOUR DADDY!) Maybe AAA Rated Towns should be exempt ...
"I really believe that this is pouring salt into the wounds," state Rep. William Hamzy, R-Plymouth, told colleagues at a meeting of the banks committee Tuesday.
"Obviously people were looking at various places for revenues," co-Chairman Sen. Robert Duff, D-Norwalk, told the committee. "This wasn't a policy decision driven by the banks committee. But we could react to it next year."
Most residential property sales in the state are subject to a conveyance tax of about 0.75 percent. The sellers pay it, and the proceeds are shared by the state and the town or city where the property is located.
Extending that tax to foreclosure sales is bad policy that hurts the real estate business, said Eugene Marconi, an attorney representing the Connecticut Association of Realtors.
"This is just one more strangling of that particular goose," he said.
Marconi and a delegation of lawyers representing the banking and real estate industries told the committee that the new law further punishes people who are already losing their homes. If their property is sold through a foreclosure auction, they'll be liable for the tax, and if they can't pay it they could be subject to liens extending for 15 years, Marconi said.
"There's a popular misconception that the bank is going to pay," he said.
But a representative of the Connecticut Conference of Municipalities urged the committee to keep the new tax in place, saying it's projected to generate $5 million in new revenue for cash-strapped cities next year and $9 million in the year after that.
The committee took no vote, but the co-chairmen said they'll discuss the topic further during the next legislative session.
Copyright © 2009, The Hartford Courant
November 19, 2009
HARTFORD —
Losing a property to creditors will get more painful next year: Some homeowners in foreclosure will be hit with a new tax.
Foreclosures sales have been exempt from Connecticut's real estate conveyance tax for years, but the General Assembly is ending that break Jan. 1.
The state is making the change to help close gaps in its budget, and cash-strapped municipalities are eager to get their share of the new revenue, too. But several state lawmakers say they're already dissatisfied with the change. (WHO'S YOUR DADDY!) Maybe AAA Rated Towns should be exempt ...
"I really believe that this is pouring salt into the wounds," state Rep. William Hamzy, R-Plymouth, told colleagues at a meeting of the banks committee Tuesday.
"Obviously people were looking at various places for revenues," co-Chairman Sen. Robert Duff, D-Norwalk, told the committee. "This wasn't a policy decision driven by the banks committee. But we could react to it next year."
Most residential property sales in the state are subject to a conveyance tax of about 0.75 percent. The sellers pay it, and the proceeds are shared by the state and the town or city where the property is located.
Extending that tax to foreclosure sales is bad policy that hurts the real estate business, said Eugene Marconi, an attorney representing the Connecticut Association of Realtors.
"This is just one more strangling of that particular goose," he said.
Marconi and a delegation of lawyers representing the banking and real estate industries told the committee that the new law further punishes people who are already losing their homes. If their property is sold through a foreclosure auction, they'll be liable for the tax, and if they can't pay it they could be subject to liens extending for 15 years, Marconi said.
"There's a popular misconception that the bank is going to pay," he said.
But a representative of the Connecticut Conference of Municipalities urged the committee to keep the new tax in place, saying it's projected to generate $5 million in new revenue for cash-strapped cities next year and $9 million in the year after that.
The committee took no vote, but the co-chairmen said they'll discuss the topic further during the next legislative session.
Foreclosures sales have been exempt from Connecticut's real estate conveyance tax for years, but the General Assembly is ending that break Jan. 1.
The state is making the change to help close gaps in its budget, and cash-strapped municipalities are eager to get their share of the new revenue, too. But several state lawmakers say they're already dissatisfied with the change. (WHO'S YOUR DADDY!) Maybe AAA Rated Towns should be exempt ...
"I really believe that this is pouring salt into the wounds," state Rep. William Hamzy, R-Plymouth, told colleagues at a meeting of the banks committee Tuesday.
"Obviously people were looking at various places for revenues," co-Chairman Sen. Robert Duff, D-Norwalk, told the committee. "This wasn't a policy decision driven by the banks committee. But we could react to it next year."
Most residential property sales in the state are subject to a conveyance tax of about 0.75 percent. The sellers pay it, and the proceeds are shared by the state and the town or city where the property is located.
Extending that tax to foreclosure sales is bad policy that hurts the real estate business, said Eugene Marconi, an attorney representing the Connecticut Association of Realtors.
"This is just one more strangling of that particular goose," he said.
Marconi and a delegation of lawyers representing the banking and real estate industries told the committee that the new law further punishes people who are already losing their homes. If their property is sold through a foreclosure auction, they'll be liable for the tax, and if they can't pay it they could be subject to liens extending for 15 years, Marconi said.
"There's a popular misconception that the bank is going to pay," he said.
But a representative of the Connecticut Conference of Municipalities urged the committee to keep the new tax in place, saying it's projected to generate $5 million in new revenue for cash-strapped cities next year and $9 million in the year after that.
The committee took no vote, but the co-chairmen said they'll discuss the topic further during the next legislative session.
Copyright © 2009, The Hartford Courant
