Who Pays Conveyance Tax in Connecticut: Rates, Exemptions, and Closing

In Connecticut, the seller pays the real estate conveyance tax. Section 12-495 of the Connecticut General Statutes puts the obligation on “the person conveying the property,” which in a normal sale is the grantor.¹ The combined state and municipal rate runs from 1% to about 2.75% of the sale price, so a $500,000 home carries roughly $5,000 in conveyance tax. Buyers and sellers can agree to a different split in the purchase contract, but if the contract is silent the seller writes the check.

The Seller’s Legal Obligation

Connecticut imposes the tax under Section 12-494 on every deed that transfers real property for $2,000 or more. Section 12-495 then names the grantor as the party who owes it, due at the moment the deed is recorded with the town clerk.¹ At closing, the seller’s funds cover the tax before the deed goes on record.

The town clerk looks to the grantor. That matters because the clerk will not record a deed without proof the conveyance tax has been paid, and an unrecorded deed is a serious title problem for the buyer.

Can the Buyer Agree to Pay It Instead?

Yes. Nothing in the statute stops the parties from negotiating a different arrangement in the purchase agreement. A buyer in a competitive market might offer to cover part or all of the conveyance tax to strengthen a bid. The statute still treats the seller as the taxpayer, so any shift is a private contractual matter between the two sides; the town clerk is not involved in enforcing it.

What the Seller Actually Pays

The tax has a state piece and a municipal piece, and the state piece depends on what kind of property you are selling.

Residential Dwellings

Single-family homes and condominiums use a tiered rate, applied marginally so each rate hits only the dollars in its bracket:²

0.75% on the first $800,000
1.25% on the portion from $800,001 to $2,500,000
2.25% on anything above $2,500,000

Unimproved Land and Other Residential Property

Unimproved land, including farm, forest, and open space parcels, is taxed at a flat 0.75% of the full sale price. The same 0.75% rate applies to residential property that is not a “residential dwelling,” such as apartment buildings.³

Non-Residential Property

Commercial and industrial buildings that do not qualify as unimproved land are taxed at a flat 1.25% of the sale price.²

Municipal Piece

Every Connecticut municipality adds its own 0.25% on top of the state rate, at a flat rate across property types. Targeted investment communities and towns with qualifying enterprise-zone manufacturing plants may add another 0.25%, bringing the local rate to 0.50%.² Bridgeport, Hartford, New Haven, New London, Norwich, and Waterbury are among those that have adopted the higher rate. If you’re unsure which rate applies, ask your town clerk.

When No One Pays

Section 12-498 exempts more than 20 categories of transfers. The ones sellers encounter most often:⁴

Deeds between spouses.
Transfers where the consideration is less than $2,000.
Deeds issued under a Superior Court decree, including divorce property divisions, foreclosure-by-sale judgments, and loss-mitigation judgments.
Deeds to nonprofits that hold undeveloped land for conservation or recreation.
Conveyances that restructure ownership without changing who actually benefits, such as moving property into your own LLC.
The first transfer of a principal residence with a pyrrhotite-damaged concrete foundation, confirmed by a licensed professional engineer, provided you have not already received money from the Crumbling Foundations Assistance Fund.
Properties where all dwelling units carry affordable-housing deed restrictions, with a proportional exemption if only some units are restricted.

One point of confusion worth flagging: a transfer called a “gift” is not automatically exempt. The tax applies whenever a deed transfers property for consideration of $2,000 or more. A true gift with no consideration falls below the threshold; a “gift” that still involves payment at or above $2,000 is taxable.

How Payment Happens at Closing

The tax is due when the deed is recorded, and in practice that means closing. The closing attorney or title company calculates the tax, collects it from the seller’s proceeds, and submits it to the town clerk for the municipality where the property sits.¹

The paperwork is Form OP-236, the Connecticut Real Estate Conveyance Tax Return, filed with a check for the state portion payable to the Commissioner of Revenue Services.⁵ The town clerk stamps the deed to confirm payment and then records it. Some municipalities accept electronic filing through the state’s myCTREC portal, depending on whether the local town clerk has opted in.⁶

What Happens If the Tax Isn’t Paid

The town clerk cannot record the deed until the return is filed and the tax is paid.¹ Without recording, the buyer has no clean title, so both sides have strong reasons to make sure the money moves at closing.

If the Department of Revenue Services later finds you underpaid, it can issue a deficiency assessment. The penalty is 10% of the shortfall when the underpayment stems from negligence or disregard of the rules, with a $50 minimum. If the underpayment is due to fraud, the penalty rises to 25% of the deficiency.¹

1
Connecticut General Assembly. Connecticut General Statutes Chapter 223 – Real Estate Conveyance Tax
2
Justia. Connecticut Code 12-494 – Imposition of Tax on Conveyances of Real Property for Consideration
3
Connecticut General Assembly. Office of Legislative Research – Real Estate Conveyance Tax
4
Justia. Connecticut Code 12-498 – Exempt Transactions
5
Connecticut Department of Revenue Services. Instructions for OP-236 Connecticut Real Estate Conveyance Tax Return
6
Connecticut State Department of Revenue Services. myCTREC