Ezel / Tax Rulings / CT
CT Ruling 89-124 Real Estate Conveyance Tax 1989-09-27

How did Connecticut conveyance tax apply when owners exchanged mortgaged half-interests in two condominiums?

Short answer: The exchange created two taxable conveyances. For each conveyance, the tax measure was the principal balance of the mortgage on the transferred condominium plus accrued interest.

Apply this to your situation

This page answers the general question as of 1989. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1989
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1989 Connecticut Department of Revenue Services Ruling applying state and municipal real-estate-conveyance-tax regulations to an exchange of undivided condominium interests subject to mortgages. The result depends on the two reciprocal conveyances and the mortgage liabilities attached to each property. This summary is informational only and is not legal or tax advice. Consult a licensed Connecticut tax professional about your specific transaction.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Owners exchanged an undivided one-half interest in one condominium for an undivided one-half interest in another. DRS treated the exchange as two conveyances, each subject to state and municipal real estate conveyance taxes.

The consideration for each conveyance included the liability attached to the transferred real estate. When each half-interest was transferred subject to its condominium's mortgage, the tax measure was the mortgage's principal balance plus accrued interest.

What this means for you

The historical ruling treated each side of a property exchange as a separate taxable conveyance and included assumed or attached mortgage liability in consideration.

Common questions

How many taxable conveyances occurred? Two.

What was the tax measure for each? The principal mortgage balance plus accrued interest.

Citations and references

  • Regs. Conn. State Agencies § 12-494-2(a)(2), as cited in the ruling.
  • Regs. Conn. State Agencies § 12-494-1(a)(2), as cited in the ruling.

Source

Original ruling text

Ruling 89-124, Real Estate Conveyance Tax

You have inquired whether an exchange of an undivided one-half interest in one condominium for an undivided one-half interest in another is subject to State and municipal real estate conveyance taxes. Two conveyances have been made, and each is subject to the taxes. See Conn. Agencies Regs. § 12-494-2(a)(2).

You have also inquired what the measure of the taxes is. The consideration received by each set of grantors would include the amount of any liability to which the realty is subject. See Conn. Agencies Regs. § 12-494-1(a)(2).

If C and D transfer their undivided one-half interest in condominium B to E and F, subject to a mortgage granted on condominium B, in exchange for E and F transferring their undivided one-half interest in condominium A to C and D, subject to a mortgage granted on condominium A, two taxable conveyances have been made. The measure of the tax in each instance is the principal balance of the mortgage plus any accrued interest.

LEGAL DIVISION

September 27, 1989

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