Buying or selling in Connecticut and hearing about the conveyance tax at closing? You’re not alone. Understanding this transfer tax helps you plan your net proceeds or cash-to-close with confidence. In this guide, you’ll learn what the tax is, how it’s calculated, who files and pays, common exemptions, and what to expect in New London. Let’s dive in.
What the conveyance tax is
Connecticut charges a real estate conveyance tax on most property transfers when the consideration is 2,000 dollars or more. The tax has two parts: a state portion and a municipal portion. Rules and exemptions are set in Chapter 223 of the Connecticut General Statutes. You can review the law in Chapter 223 of the Connecticut General Statutes.
How Connecticut calculates the tax
State rates for residential sales
For residential property, the state uses a graduated schedule for conveyances on or after July 1, 2020: 0.75 percent on the first 800,000 dollars, 1.25 percent on the portion over 800,000 dollars up to 2,500,000 dollars, and 2.25 percent on the portion above 2,500,000 dollars. These are often called the mansion-tax tiers. See the state’s summary in the DRS legislative update on conveyance tax changes.
Non-residential and other categories
Non-residential property and some special categories have different state rates set by statute. If your property is mixed-use, land only, or otherwise unique, confirm the applicable category in Chapter 223 of the Connecticut General Statutes.
Municipal portion in Connecticut towns
Cities and towns also collect a municipal conveyance tax. Statute sets a base municipal rate, and certain designated municipalities may add a local surtax. New London is among the eligible municipalities that may impose the higher local rate. For background on eligible towns and the surtax authority, see the OLR report on municipal conveyance taxes.
Who files and when payment is due
In most transactions, the seller (grantor) or the seller’s attorney files Form OP‑236 and pays the tax at recording. Contracts sometimes shift who ultimately pays, but statutory filing responsibility is with the grantor. Learn more on the DRS conveyance tax information page.
Payment is due when the deed is recorded with the town clerk. A taxable deed will not be recorded unless the return is filed and the tax shown as due is paid. See timing and recording requirements in CGS §12‑497.
Many municipalities accept electronic submission through myCTREC. Check town participation and access forms on the DRS real estate forms page and the myCTREC portal overview.
New London and Southeastern Connecticut: what to expect
New London is identified among towns that may charge the higher municipal rate. Historically, that local portion equals 0.50 percent of the sale price in eligible towns. Always verify the current local percentage with the New London Town Clerk before closing. For context on eligible municipalities, review the OLR municipal conveyance tax report.
Here are two illustrative examples. Use your exact contract price and confirm New London’s current municipal rate with the Town Clerk.
Example at 500,000 dollars (residential):
- State: 0.75 percent of 500,000 dollars = 3,750 dollars. See the DRS legislative update.
- Municipal (if 0.50 percent): 2,500 dollars. See the OLR report.
- Total due at recording: 6,250 dollars.
Example at 1,000,000 dollars (residential):
- State: 0.75 percent on first 800,000 dollars = 6,000 dollars; 1.25 percent on remaining 200,000 dollars = 2,500 dollars; total state = 8,500 dollars. See the DRS legislative update.
- Municipal (if 0.50 percent): 5,000 dollars. See the OLR report.
- Total due at recording: 13,500 dollars.
New London pre-closing checks
Before you sign closing documents in New London, confirm:
- Whether the town currently uses myCTREC for OP‑236 e‑filing. Reference the myCTREC overview.
- How checks are made payable for the municipal portion and recording fees.
- The exact municipal rate in effect and page-fee totals for recording.
Common exemptions and special cases
Transfers between spouses and certain parent or child transactions may be exempt by statute. There are also exemptions for a deed in lieu of foreclosure that transfers the transferor’s principal residence and for some short sales where sale proceeds are insufficient to pay superior liens. Review DRS guidance in the Special Notice on deeds in lieu and short sales and statutory exemptions in Chapter 223.
If you claim an exemption, you still file OP‑236 and include the correct exemption code with any required documentation. Forms and instructions are on the DRS real estate forms page.
For very high-value residential sales, the 2.25 percent bracket applies to the portion above 2,500,000 dollars. Connecticut provides a mechanism that may allow qualifying residents to recoup the higher‑rate portion through future income tax credits. See the DRS legislative update on conveyance tax changes for details and discuss eligibility with a tax professional.
Other special categories include manufactured-home park transfers, which use a separate OP‑236 HP form and guidance, summarized in this DRS informational publication. If land is classified as farm or forest, a separate rollback tax may apply under statute, so confirm status early in your listing or purchase process.
Step-by-step closing checklist
Use this quick checklist to avoid last-minute friction at closing:
- Confirm the final sale price and run a sample calculation showing the state and municipal portions. Use the residential tiers in the DRS legislative update.
- Verify the correct property category: residential, non-residential, land only, or a special case under Chapter 223.
- Prepare and file OP‑236 at recording, or use myCTREC if the town participates. Access forms and instructions on the DRS real estate forms page.
- If claiming an exemption, enter the correct code and attach required documentation. Keep copies with your closing file. See the OP‑236 instructions on the DRS forms page.
- Check your purchase and sale contract to see if the buyer and seller negotiated who covers the tax. Confirm payment logistics with your closing attorney and the town clerk.
Planning ahead for the conveyance tax helps you price, negotiate, and close with confidence. If you want a clear plan for your sale or purchase in Southeastern Connecticut and nearby Rhode Island, connect with the trusted team at The Jodie Jordan Group for calm, expert guidance from offer to recording.
FAQs
Who pays the Connecticut conveyance tax in a home sale?
- By statute, the seller or the seller’s attorney files OP‑236 and pays the tax at recording, though your contract may allocate the cost differently. See the DRS overview for filing responsibility.
When is the Connecticut conveyance tax due at closing?
- The tax is due when the deed is recorded with the town clerk. A taxable deed will not be recorded unless the return is filed and the tax shown as due is paid.
Are New London short sales exempt from the conveyance tax?
- Certain short sales and deeds in lieu involving a principal residence can be exempt if they meet statutory conditions and documentation requirements outlined by DRS.
How do the mansion-tax tiers work in Connecticut?
- For residential sales, the state rate is 0.75 percent up to 800,000 dollars, 1.25 percent from 800,000 to 2,500,000 dollars, and 2.25 percent above 2,500,000 dollars. The higher-rate portion may qualify for resident recoupment via income tax credits under state guidance.
What form do I need to file the conveyance tax?
- Use Form OP‑236 for most transfers, and OP‑236 HP for certain manufactured-home park sales. OP‑236 must be filed even for exempt transfers so the town clerk has the reason for exemption on record.
Does New London accept electronic filing for OP‑236?
- Many towns use myCTREC for e‑filing, but participation varies. Check DRS myCTREC guidance and confirm with the New London Town Clerk before closing.
