The Connecticut governor’s plan to steeply hike taxes on realty transactions is a misguided effort at fixing the state budget on the backs of property owners and would mean a fresh setback for realty sales and values, Realtors say.
Connecticut Realtors, the state’s leading Realtor lobby, with more than 17,000 members, on Wednesday voiced opposition to Gov. Dannel P. Malloy’s latest budget proposal that would lift by 25 percent the state conveyance tax on commercial and residential property sales, effective Nov. 1.
For a property selling for $200,000 that’s an additional $500 in increased taxes to close the transaction, said CT Realtors President Michael Barbaro. In sum, the proposal issued last week would siphon an additional $50 million in taxes from property owners in 2018 alone, and then jumps to more than $77 million in new tax revenue in 2019, Barbaro said.
“That is cash directly from the equity in a home or business that the state should not be entitled to take,” he said in a statement. “Many home prices have not recovered over the past 10 years, and many homes have lost value. Our Connecticut property owners should not be asked to bail out the state with money they may not even have.”
Barbaro added, “What the governor’s budget proposal fails to accurately capture is the enormity of the impact on the housing market in Connecticut when such regressive taxes are increased. Real estate needs to recover if we are ever going to return to a stable economy in Connecticut.
These regressive taxes are bad for property owners, bad for business and bad for Connecticut.
“Homeowners aren’t the only ones being harmed; commercial property owners will also be hit with these tax increases if they consider expanding or downsizing their business property. We are urging legislators to do no harm to our economic drivers, specifically, real estate.”
The governor’s office did not immediately respond to a request for comment.
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