A cluster of bills that would increase the cost of transferring real estate and a bill that would change how the public is notified of zone change applications are at the top of the Connecticut Association of Realtors’ list of concerns for the 2005 legislative session, which ends in about three weeks.
CAR opposes the bills that would increase conveyance taxes.
“We’re concerned with several bills that have to do with the cost of transferring real estate in Connecticut,” said Tim Calnen, CAR’s vice president of government affairs.
The bills would affect different aspects of transfers, but would all add to what Calnen called a “cumulative effect” for the cost of transferring real property.
“It’s been a piling-on of taxes in what we consider a somewhat stealthy manner,” he said.
One of the proposals, Senate Bill 6841, has essentially been a source of debate for years. In 2003, the state Legislature passed a bill allowing municipalities to increase their conveyance taxes. The increases were supposed to last 15 months and sunset in June 2004, but last year the Legislature extended it to June 30 of this year. Senate Bill 6841 would essentially make the tax hike permanent, according to a legislative report from CAR.
“It would undo the June 30 day [the tax is supposed to sunset],” Calnen said.
That bill was referred to the Committee on Planning and Development last week.
Another bill in the same cluster is House Bill 6393, which would allow any municipality after July 1 to impose a new 1 percent conveyance tax on buyers of real estate on the portion of the sales price in excess of $100,000, according to CAR. The bill, which is called “An Act Concerning Community Preservation and Investment,” would mark the first time that buyers would be subject to any sort of conveyance tax.
“Both sides of the transaction would get hit,” Calnen said.
That bill was referred to the Committee on Finance, Revenue and Bonding earlier this month, according to the state Legislature’s Web site.
Senate Bill 410 also would increase fees related to the transfer of property. The bill would impose a $30 deed recording surtax on any real estate transfer.
The bill “continues the Legislature’s unrelenting piling-on of fees and levies when people transfer real property,” according to CAR’s legislative report.
The Senate last week referred Senate Bill 410 to the Committee on Finance, Revenue and Bonding.
A ‘Super’ Tax
The last bill that would increase the cost of buying or selling a home is House Bill 6442, which would spread a “super” conveyance tax – a clause that allowed municipalities like Bridgeport to raise their conveyance tax by an extra 0.25 percent – to all the communities in the state. That bill has had no action taken on it since February, according to the Legislature’s Web site.
CAR is opposed to the entire cluster of bills because of the cumulative effect they are having on conveyance taxes, Calnen said. Before 1983, the state had no conveyance tax, but it approved one that year. Now there is one at the state level and possibilities for towns to increase their conveyance taxes.
CAR is also supporting some bills. Substitute House Bill 6870, for example, would “provide better, more uniform notification to affected landowners when municipal zoning commissions or planning and zoning commissions initiate proposed changes in zoning regulations or boundaries,” according to CAR’s legislative report. “Present laws and practices vary widely by town. Many only provide a minimal level of advance disclosure about an upcoming public hearing [such as a legal notice in the newspaper].”
Substitute House Bill 6870, more specifically, would require a town commission, whenever proposing a zoning boundary change or a significant change to an allowable use, to send a mail notice of any hearing to people who own the land that is subject to the hearing, and to those who own adjacent land.
The bill was moved to the foot of the House’s calendar late last month, a move that effectively means it won’t be addressed. Calnen said he and CAR aren’t certain of who is opposing it or the reasons behind the opposition.
“It’s run into some flack, and we’re not quite sure why,” he noted.
CAR is therefore looking to support another piece of legislation that would accomplish the same important points.
Other bills CAR supports are Senate Bill 1254, which is waiting for action by the House. The bill would “ease restrictions on real estate licensees operating under an ‘entity’ form of ownership, thereby making regulation conform more closely to other professions and to guard against excessive penalties for minor violations of the law,” according to CAR’s legislative report.
The bill would remove language in the license law that says everyone who actively participates in a real estate brokerage must be licensed as a real estate broker. It precludes licensed salespeople from being officers of the firm or having an ownership interest, according to CAR.
“[The bill] would modernize the standards for how they comport themselves,” Calnen said.
That bill may also have some opposition, but Calnen said he isn’t sure of the reasons why.
