A Connecticut licensee is working with a seller who is transferring a residential property to a qualifying charitable organization that is exempt from property taxes under Connecticut law. The seller asks whether the Connecticut real estate conveyance tax will apply to this transfer. Which response most accurately reflects Connecticut law?
Correct Answer
A) The transfer is fully subject to the standard tiered conveyance tax because exemptions from property tax do not automatically create exemptions from conveyance tax.
Under CGS § 12-494, Connecticut's conveyance tax is imposed on the grantor (seller) based on the transfer of real property. While certain specific exemptions exist (such as transfers between spouses, court-ordered transfers, or transfers to qualifying governmental entities), a blanket exemption does not apply simply because the receiving organization is exempt from property taxes. The conveyance tax is a separate tax on the act of transfer, and property tax exemption status of the grantee does not automatically confer conveyance tax exemption. Licensees should advise clients to consult a tax attorney to determine whether a specific statutory exemption applies.
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