Many homeowners with a mortgage may not think about property taxes very much, since the tax bill is likely paid out of their mortgage escrow account automatically. If you're selling your home in Connecticut, however, property taxes and other real estate taxes may factor into your closing costs.
Here are the typical tax rates for a home in Connecticut, based on the typical home value of $414,183.
| Tax Type | When you pay | Typical amount |
|---|---|---|
| Property Taxes | Yearly | The average property tax rate is 1.74%, which works out to $7,207 each year for the median home value in the state. |
| Transfer taxes | After selling, at closing | Connecticut charges you about 1.% of your home's sale price to transfer the title to the new owner. If you sell for Connecticut's median home value — $414,183 — you'd pay $4,142. |
| Capital gains taxes | After selling, when filing yearly income taxes | Under the current federal capital gains tax rules, a typical Connecticut homeowner who has lived in their house for at least two years out of the last five years will pay nothing in federal capital gains taxes when they sell their house. |
Property taxes in Connecticut
The average effective property tax rate in Connecticut is 1.74%, but this can vary quite a bit depending on which county the home is in.
| County | Property tax rate | Effective tax* |
|---|---|---|
| Fairfield County | 1.83% | $7,580 |
| Hartford County | 2.40% | $9,940 |
Property tax breaks and credits in Connecticut for sellers
If you’re selling a home, there are tax breaks and write-offs available to you to save money.
If you make any significant repairs and improvements to your home prior to listing it on the market, they could be tax deductible. The key is that these repairs must be related to the sale. Keep records of any buyer requests for repairs after the home inspection or any lists that your agent makes for you, and save all estimates and receipts.
Repairs fall into the bucket of required maintenance to keep the home functioning, and you can deduct them immediately. Improvements increase the property’s value and can only be deducted over a number of years.
When filing your yearly tax return, you can deduct the interest paid for the first $750,000 of your mortgage debt for a primary home as well as a secondary home. If you're married filing separately, you can deduct $375,000.
To qualify, your primary home must meet the following criteria:
- The home must be a house, co-op, condo, mobile home, house trailer, houseboat or an apartment.
- The home must be used as collateral for the loan.
- The home must have sleeping, cooking, and toilet facilities.
In order to deduct interest on a second home, it must be collateral for the loan. If you rent out your second home, you must use the home yourself for a minimum of 14 days or more than 10% of the rental time.[1]
State property tax exemptions in Connecticut
In Connecticut, there are several property tax exemptions available for qualifying homeowners. Some exemptions may not be available in all municipalities.
- Exemption for the disabled: $1,000 property tax exemption.
- Exemption for the blind: $3,000 property tax exemption.
- Standard exemption for veterans:$1,000 property tax exemption.
- Additional exemption for veterans: An additional income-based exemption for married households with incomes under $21,000, or single households with incomes under $18,000, is $2,000. For households above the income threshold, the benefit is $500.
- Exemption for disabled veterans: The amount of the exemption varies according to the disability rating, ranging from $1,500 for ratings between 10% and 25%, and $3,000 for ratings of 75% and above. All veterans with disability ratings who are at least 65 years old receive a $3,000 exemption. In addition, veterans who are receiving compensation from the United States for the loss of a limb may qualify for a $3,000 exemption. Married veterans with household incomes under $21,000, or unmarried veterans with a household income under $18,000, receive an additional exemption equal to 200% of their disabled veterans' exemption. Eligible veterans with incomes above the threshold receive an additional exemption equal to 50% of their disabled veterans' exemption.
- Circuit breaker for elderly or disabled homeowners: Connecticut provides state-reimburse “circuit breaker” property tax credits to homeowners who are at least 65 years old or totally disabled, and whose annual incomes do not exceed certain limits. The widow or widower of someone who received benefits at time of death also qualifies for this relief. Income ceilings are $39,500 for married claimants and $32,300 for single claimants. The maximum benefit for married applicants is $1,250. The maximum benefit for single applicants is $1,000.
- Income tax credit for property tax paid: The state indirectly reduces property tax payments by providing an income tax credit for those payments on a primary residence, privately owned or leased motor vehicle, or both. The credit amount depends on the amount of property tax due and paid and the taxpayer's Connecticut-adjusted gross income. The percent of property tax paid that can be taken as a credit declines as income increases, until it completely phases out. The maximum credit amount, regardless of filing status, is $300. The credit may not reduce a taxpayer's liability to less than zero.
- Optional relief for property taxes exceeding 8% of homeowner’s income: Municipalities may also establish a program allowing homeowners to defer property taxes due if those taxes exceed 8% of the owner’s income. Deferred taxes are a lien on the property and must be paid, with 6% interest upon sale or transfer of the property.
- Optional relief for firefighters and emergency personnel: Property tax relief to the non-salaried local emergency personnel. This tax relief may provide either (1) an abatement of up to $1,000 in property taxes due for any fiscal year, or (2) an exemption applicable to the assessed value of real or personal property up to an amount equal to $1 million divided by the mill rate. Surviving spouses of police officer or firefighter who dies while in the performance of his or her duties may abate all or a portion of the property tax on the principal residence.
- Transfers between spouses
- Conveyances pursuant to certain court decrees, including as a result of (a) an annulment, dissolved marriage, or legal separation or (b) foreclosure by sale
- Transfers of property to any nonprofit organization organized to hold undeveloped land in trust for conservation or recreation purposes
- Deeds made pursuant to corporate mergers
- Transfers of a principal residence where the gross purchase price is less than the total amount the seller owes on the property for mortgages and tax liens (i.e., “short sales’)
- Transfers of certain principal residences with concrete foundations that have deteriorated due to the presence of pyrrhotite
- $47,025 for single and married filing separately
- $94,050 for married filing jointly and qualifying surviving spouse; and
- $63,000 for head of household.
- More than $47,025 but less than or equal to $518,900 for single;
- More than $47,025 but less than or equal to $291,850 for married filing separately;
- More than $94,050 but less than or equal to $583,750 for married filing jointly and qualifying surviving spouse; and
- More than $63,000 but less than or equal to $551,350 for head of household.
- Home values, list prices, and sale prices: Based on Zillow data as of February 2025.
- Transfer taxes and mortgage taxes: Based on public data as of February 2024.
Property tax breaks and credits in Connecticut for buyers
If you’re buying a home, many tax breaks and credits available to you are meant to reduce the costs associated with home ownership.
As the new owner of a home, you can deduct your mortgage interest for a portion of the year just like mentioned above.
Other tax-saving programs and credits, such as homestead exemptions and first-time homebuyer credits may be available. For more information about property tax relief programs in Connecticut, see the Connecticut Department of Revenue Services.Transfer taxes in Connecticut
| 💰 Estimated cost: | 1.00% |
Transfer tax is a blanket term used to describe fees charged by the state or local municipality when transferring property from one entity to another.
Connecticut's current transfer tax rate is usually $0.75 to $2.25 per $100. So, for a house worth $414,183 — the median home price in the state — the transfer tax due will be $4,142.
Some cities and counties also charge their own transfer taxes. Check with your realtor and title company to see what taxes you'll owe in your area.
The specifics on who pays the transfer tax in Connecticut are sometimes up for negotiation, but usually the seller is responsible.
Transfer tax exemptions in Connecticut
Although most typical real estate sales are subject to the conveyance fee in Connecticut, some are exempt:Capital gains tax in Connecticut
| 💰 Estimated cost: | $0 |
Capital gains are profits made from selling an asset. If you sell your property at a gain, you may owe taxes on the profits to the IRS and the state. Fortunately, there are ways to avoid paying taxes on your home sale profits.
Federal capital gains taxes in Connecticut
A typical Connecticut homeowner selling their primary residence will not owe federal capital gains taxes.
If you have lived in your house for at least two out of the last five years, you can exclude up to $250,000 in profits, or up to $500,000 if filing jointly with your spouse.[2]
In 2023, the typical U.S. home seller made $121,000 on the sale of their home. While this is a healthy profit, it's far below the threshold to be liable for capital gains taxes.[3]
Keep in mind that your profit isn't simply the sale price minus your original purchase price. You can factor in the cost of permanent improvements and other expenses when calculating the total gain. For more information on determining your gain or loss, as well as eligibility requirements for this exclusion, see IRS Publication 523, "Selling Your Home."
If you don't qualify for the exclusion—either because you didn't live in the home long enough or made a large profit from the sale—you may owe capital gains tax. The amount you pay depends on your overall income.
Federal capital gains tax rates for tax year 2024
A capital gains rate of 0% applies if your taxable income is less than or equal to:
A capital gains rate of 15% applies if your taxable income is:
However, a capital gains rate of 20% applies to the extent that your taxable income exceeds the thresholds set for the 15% capital gain rate.[4]
State capital gains taxes in Connecticut
In most states, capital gains are taxed as income at the state level, as well.
Connecticut generally follows the same exclusion rules as the IRS, allowing $250,000 of gain on home sales ($500,000 for married joint filers), if they owned and used the home as their principal residence for two out of the five years before the sale.
In Connecticut, any capital gains not subject to exclusions are taxed as ordinary income at a rate of 7%. There is a once-in-a-lifetime exemption for the sale of a principal residence if the taxpayer is 65 or older. The residence must have been owned and maintained as a principal residence for five of the eight years leading up to the sale. There is no dollar limit for this type of exemption.
»MORE: Avoid capital gains taxes when selling a house
Methodology
The Clever team of researchers gathered data for property taxes, transfer taxes, and capital gains rules using publicly available information from government websites.
Additionally, we utilized the following data:
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