#Finance, Revenue and Bonding Committee
JOINT FAVORABLE REPORT
Bill No.: HB-6630
AN ACT CONCERNING THE RATE OF THE REAL ESTATE CONVEYANCE
Title: TAX ON CERTAIN CONVEYANCES.
Vote Date: 4/22/2021
Vote Action: Joint Favorable
PH Date: 3/17/2021
File No.:
Disclaimer: The following JOINT FAVORABLE Report is prepared for the benefit of the
members of the General Assembly, solely for purposes of information, summarization and
explanation and does not represent the intent of the General Assembly or either chamber
thereof for any purpose.
SPONSORS OF BILL:
Finance, Revenue & Bonding Committee
REASONS FOR BILL:
The purpose of the bill is to reduce the real estate conveyance tax on certain new
construction homes. The bill would reduce the real estate conveyance tax to a 1.25% rate for
the entire portion of the sales price of new homes that exceeds $800,000 eliminating the
current 2.25% rate on homes that exceed $2.5 million.
On July 1, 2020, Connecticut increased the conveyance tax rate applied to sellers of real
property from 1.25% to 2.25% on the portion of the sale that exceeds $2.5 million in
accordance with PA 19-117. Under this law a seller who stays in Connecticut for three years
after the sale of a home can begin to recoup the difference via a tax credit equal to 1/3 of the
conveyance tax paid over a span of three years. In order, to recoup the entire difference the
seller would have to remain in Connecticut for a total of six years after the sale of the home.
RESPONSE FROM ADMINISTRATION/AGENCY:
Melissa McCaw, Secretary of the State of Connecticut-Office Policy and Management
Opposed
Secretary McCaw testified in opposition of the bill due to the revenue loss to the State of
Connecticut's General Fund. The Secretary stressed that at a time when the state is already
facing budgetary shortfalls it needs to be able to fully access federal revenues allocated to
the state under the recently passed American Rescue Plan Act of 2021. The federal act
specifies that the state must not pass any law that would directly or indirectly reduce net tax
revenues. Additionally, this bill would provide tax cuts to only a few specific taxpayers while
requiring the state to either reduce current spending or increase other tax rates to offset
those cuts.
NATURE AND SOURCES OF SUPPORT:
Connecticut REALTORS
The Connecticut REALTORS testified in support of the bill in the hopes of retaining the
wealthier residents in the state. They testified that their members are watching wealth move
out of Connecticut, often due to significant concerns about the financial impact of the state's
tax policies. They testified that the additional conveyance tax would be a step in the right
direction, encouraging the wealthy to move to or stay in Connecticut. Additionally, repealing
the tax would make Connecticut more competitive in attracting wealth to move to
Connecticut, allowing the state to later realize the income taxes of wealthy individuals who
can relocate anywhere. Connecticut should strive to appeal to these individuals to settle in
our state and grow our economy.
Anthony B. DeRosa, Managing Member of DeRosa Builders LLC
Mr. DeRosa's testimony represents more than a dozen realtors and developers in Fairfield
County. They feel that the legislature should want to encourage builders to build the type of
homes synonymous with the great estates in CT and not push other builders to ultimately
build in Westchester or Massachusetts so that they can get around the additional conveyance
taxes. They urge the passage of HB 6630 to correct this oversight and promote new
developments and attract more buyers to the State of CT.
James Narduzzo, Vice President of BENDER
Mr. Narduzzo testified that the current conveyance tax places an extra burden on new
construction. With the rising cost of materials along with additional taxes and extra fees it is
very challenging in the sales and building of new homes in CT.
Jim Perras, CEO of the Home Builders & Remodelers Association of Connecticut, Inc.
Mr. Perras testified that by repealing the current tax conveyance rate it will free up more
capital, giving small business builders greater ease to flow from one project to another and
will help them to better keep up with rising demand. This would make Connecticut more
competitive with surrounding states that are also vying for wealthier transplants fleeing New
York and elsewhere for suburbia. Recent data has shown that many of those leaving the city
are highly mobile professionals and small to midsized business owners who are bringing
significant economic activity with them. Connecticut should do everything it can to attract
these individuals to help reverse the trend of outward migration and grow our economy.
Gregory Ugalde, President and CEO of T&M Building Co, Inc.
Mr. Ugalde testified that the focus of the legislature should be the affordability of housing in
Connecticut and that the current legislation was enacted to discourage the wealthier
residents from moving out of the state. He states that every effort to build housing that
people can afford to purchase and homes that allow them to live safely is imperative.
The legislature should do everything it can to encourage new construction when existing
inventory and production are not meeting the demand, thereby driving up the cost of housing.
NATURE AND SOURCES OF OPPOSITION:
Page 2 of 3 HB-6630
None expressed
Reported by: Dawn Silveira Date: 5/5/21
Page 3 of 3 HB-6630


Statutes affected:
Raised Bill: 12-494
FIN Joint Favorable: 12-494
File No. 652: 12-494