Looking for a better way to benchmark your global mobility program?
The state of Connecticut has provided additional assistance to owners of principal residences whose foundations are subject to crumbling due to the presence of the mineral pyrrhotite. As of July 1, 2019, sales of principal residences whose foundations are certified by a licensed engineer as containing pyrrhotite will be exempt from the Connecticut conveyance tax.
However, this relief is not available to sellers who received financial assistance from the Connecticut Crumbling Foundations Assistance Fund, and it is only available on the first sale after the certification is received.
The Connecticut state conveyance tax is currently .75% of the first $800,000 of sales price, and 1.25% of the sale price above that amount. Municipalities also are authorized to charge an additional conveyance tax. Properties covered by the new law would be exempt from both taxes.
In addition, Connecticut’s new budget law, enacted June 26, 2019, includes a so-called “mansion tax,” under which a new 2.25% conveyance tax rate would apply to the portion of the sales price exceeding $2,500,000. That new tax goes into effect on July 1, 2020, and presumably would also be covered by the law exempting sales of principal residences with possibly crumbling foundations.
This relief is among a host of provisions seeking to alleviate the difficulties experienced by homeowners whose concrete foundations are at risk of deterioration due to the presence of pyrrhotite. For example, the IRS has several times provided favorable guidance as to the availability of casualty loss deductions for damage to such foundations. See Rev. Proc. 2017-60, which allows such loss deductions, and statements by the IRS that the limitations of the Tax Cuts and Jobs Act on the casualty loss deduction will not be applied to these losses.
Connecticut is a state in which relocation home sales are only subject to one conveyance tax even if two deeds are used and recorded, so long as the employer or relocation management company resells the home within six months of its acquisition. Consequently, two deeds, rather than a blank deed, are commonly used in Connecticut, and only one conveyance tax is paid. It appears that the new law will eliminate that one tax as well, that is, the tax on the conveyance from the employee to the employer or relocation management company, if the home being sold is certified as having a foundation containing pyrrhotite.
To the extent Worldwide ERC® members take homes with affected foundations into their home sale programs, there will be a cost saving from avoidance of the Connecticut real estate conveyance tax.
A new wealth tax in Venezuela has implications for companies and employees operating in Venezuela.
India’s reduction of corporate tax rates are intended to attract business.
Sign up and receive the latest mobility news, articles, education and more as soon as it’s published.
Mobility is Worldwide ERC®’s monthly magazine, delivering industry and business news and updates, as well as insights on global talent mobility programs, tips and trends.
The Worldwide ERC community is the largest and most engaged group of mobility experts on the planet.