Submitted to the Finance, Revenue and Bonding Committee

March 24, 2008

By
Dan Keune

My name is Dan Keune and I'm representing the Connecticut Association of REALTORS®. I run a small real estate company in Ellington, and like most of our 19,000 association members I am a homeowner too.

I am here today to speak in strong opposition to Raised Bill No. 5885 which cancels the long, overdue property tax relief scheduled for homesellers on June 30, 2008. We are disappointed that our lawmakers would even consider a fourth extension to sunset the temporary increases in the real estate conveyance tax.

The home sales tax hike was acknowledged as bad tax policy by lawmakers when they passed the temporary increases in 2003. It is even worse public policy in today's troubled real estate market.

It's not based on ability to pay, or even on profit. It is calculated on the total price of a home. Sellers with little to no equity, who may even sell at a loss, are still required to pay the tax on the full purchase price of the property. Seniors who are counting on equity to fund their retirement, are robbed of that equity. For every seller who has paid property taxes on the home, to his municipality, another tax at closing feels like a double dip.

Supporters of the conveyance tax say it has not hurt real estate sales, … that the only people complaining are the REALTORS®. That's a red herring. It's not whether it hurts sales - - it's whether it hurts people selling and buying a home. It clearly makes that process more painful.

Please understand the multi-layered nature of Connecticut's conveyance tax. Here is an example of how the tax affects the sale of a $300,000 home, - not an unusual price in our State:

1)	The Original Town Conveyance Tax @ $1.10 / $1,000	=	$330.
2)	The 2003 Increase of $1.40 / $1,000	=	$420.
3)	The 2003 "Distressed Municipality" Increase of $2.50 / $1,000	=	$750.*
4)	The State Conveyance Tax @ $5.00/$1,000	=	$1,500.
TOTAL PAID BY HOMESELLERS			$3,000.

Allowing the temporary increases to sunset would save sellers across the state about $420 on that home. Towns would continue to receive their "base conveyance tax" money and the State would continue to capture its take.

We would love to see the entire tax end. But we are here today to ask that the temporary increases approved in 2003, be allowed to finally sunset. That is a very reasonable request.

I appreciate your time and consideration and I'd be happy to answer any questions you may have.

* Paid by property sellers unfortunate enough to reside in 18 of the State's poorest cities and towns.