Ezel / Tax Rulings / CT
CT Ruling 90-3 Real Estate Conveyance Tax 1990-01-11

Was conveying an interest in real property subject to state and municipal conveyance taxes when the interest was encumbered?

Short answer: Yes under this ruling. An encumbered real-property interest was treated as conveyed for consideration and was therefore subject to both Connecticut state and municipal real estate conveyance taxes.

Apply this to your situation

This page answers the general question as of 1990. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1990
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 1990 Connecticut Department of Revenue Services Ruling applying the real-estate-conveyance-tax regulation then in effect to an encumbered property interest. The short published text provides no transaction-specific facts and does not state that the ruling remains current; later legal changes or different encumbrance terms can change the result, so another transferor should not assume it applies. This summary is informational only and is not legal or tax advice. Consult a licensed Connecticut tax professional about your specific situation.
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

DRS ruled that transferring an interest in real property subject to an encumbrance was a conveyance for consideration.

The transfer was therefore subject to both Connecticut state and municipal real estate conveyance taxes under the cited regulation.

What this means for you

The historical ruling treated the encumbrance itself as enough to make the conveyance one for consideration. A transfer was not tax-free merely because no separate cash price was described.

Common questions

Did the encumbrance count as consideration? Yes.

Which conveyance taxes applied? Both state and municipal taxes.

Citations and references

  • Conn. Agencies Regs. § 12-494-1(a)(2).

Source

Original ruling text

Ruling 90-3, Real Estate Conveyance Tax

Ruling 90-3

Real Estate Conveyance Tax

A conveyance of an interest in real property, where such interest is subject to an encumbrance, is a conveyance for consideration and, accordingly, is subject to State and municipal real estate conveyance taxes. See Conn. Agencies Regs. §12-494-1(a)(2).

LEGAL DIVISION

January 11, 1990

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