- June 02, 2020
- All Connecticut Issuing Offices
- LEGISLATIVE UPDATE - Legislation and COVID and General Real Estate Updates
This is a reminder that following real estate related bill was passed in 2019 and is effective July 1, 2020:
Conveyance Tax Change: Public Act 19-117 (HB7424, Section 337), effective July 1, 2020, provides that sellers of Connecticut homes will be required to pay a real estate conveyance tax of 2.25% (increased from 1.25%) with respect to the portion of the sales price in excess of $2.5 million ("mansion tax"). Related to this increase and effective January 1, 2021, taxpayers who remain in Connecticut following the sale will be permitted to take a property tax credit against their Connecticut income tax in an amount equal to 1/3 of the conveyance tax paid at the "mansion" tax rate. However, this credit does not become available until the third year after the conveyance tax is paid.
II. COVID-19 Governor Orders
To date Governor Ned Lamont has issued over 50 Orders as a result of the pandemic sweeping the world. Many of the orders affected real estate matters in terms of temporarily permitting remote notarization, removing witness requirements for conveyancing, staying of appeal periods and court actions. Many of such orders had expiration dates for such matters while others were open ended. In particular we call your attention to the remote notarization procedures set to expire June 23, 2020, unless further extended.
III. Uniform Closing Standards
MISMO, the Mortgage Industry’s Standards Maintenance Organization, has announced the issuance of standardized closing instruction templates that lenders can use as a means of reducing closing errors. The templates were produced by a workgroup created through MISMO consisting of ALTA, AEA (American Escrow Association), MBA and various other industry players. The goal is to eliminate ambiguity and inefficiency by providing the Settlement Agent with a standardized and more streamlined presentation of all relevant loan information and lender requirements. The templates include two distinct documents: a Master Closing Instruction Template and a Transactional Closing Instruction Template, both of which focus on format and organization of closing instructions. While use of the forms is not mandatory, major lenders provided input early in the development process which increases the likelihood that some may eventually utilize them.
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