Could a decedent's estate claim Connecticut's principal-residence exemption from real estate conveyance tax when selling the decedent's former home?

Plain-English summary

A decedent had been the sole owner of her principal residence and had been approved for property-tax assistance under Conn. Gen. Stat. § 12-129b. She had no surviving spouse and no owner or tenant held a joint interest. After her death, the estate's representative sold the former home and asked whether the deed qualified for the historical real estate conveyance-tax exemption in Conn. Gen. Stat. § 12-498(b)(1).

DRS ruled no. The exemption applied to a deed of the principal residence of a person approved for assistance for the current assessment year of the municipality in which the person resides. Strictly construing that tax exemption, DRS concluded that the deceased owner no longer resided in the municipality and no longer had a principal residence there when the estate conveyed the property.

The ruling also noted that the related property-tax relief ended at death. DRS therefore would not extend the conveyance-tax benefit to the estate.

What this means for you

Under this historical provision, approval for property-tax assistance during the owner's lifetime did not let the estate claim the owner's principal-residence conveyance-tax exemption after death. The result depended on the statutory wording and the facts that the decedent had been the sole owner, had no surviving spouse, and had no joint owner or tenant.

Common questions

Did the decedent qualify for assistance before death? Yes. The ruling says she had been approved under § 12-129b for the municipality's current assessment year.

Why did the estate lose the conveyance-tax exemption? DRS read the statute to require the approved person to reside in the municipality when the property was conveyed. A deceased person could not satisfy that condition.

Does the ruling decide a case involving a surviving spouse or joint owner? No. The stated facts expressly said there was no surviving spouse and no joint owner or tenant.

Citations and references

• Conn. Gen. Stat. § 12-498(b)(1).
• Conn. Gen. Stat. § 12-129b.
• 1989 Conn. Pub. Acts 205, § 2.
• Plastic Tooling Aids Laboratory, Inc. v. Commissioner, 213 Conn. 365, 369 (1990).

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 90-52

Original ruling text

Ruling 90-52, Real Estate Conveyance Tax

Ruling 90-52

Real Estate Conveyance Tax

ISSUE:

Whether the representative of a decedent's estate conveying what had been, at the time of the decedent's death, the decedent's principal residence, is entitled to claim the exemption from the State real estate conveyance tax provided by Conn. Gen. Stat. §12-498(b)(1) for "deeds of the principal residence of any person approved for assistance under section 12-129b ... for the current assessment year of the municipality in which such person resides ...."

FACTS:

The representative of a decedent's estate conveyed real property which had been the decedent's principal residence at the time of her death.

The decedent, at the time of her death, had been "approved for assistance under section 12-129b ... for the current assessment year of the municipality"; Conn. Gen. Stat. §12-498(b)(1).

The decedent had been the sole owner of the property.

The decedent had no surviving spouse.

There was no owner or tenant possessing a joint interest in the property with the decedent.

Both the decedent's death and the conveyance by the representative of the decedent's estate of what, at the time of her death, had been the decedent's principal residence occurred after the effective date of 1989 Conn. Pub. Acts 205.

RULING:

Conn. Gen. Stat. §12-498(b)(1), as amended by 1989 Conn. Pub. Acts 205, §2, exempts from the State real estate conveyance tax "deeds of the principal residence of any person approved for assistance ... for the current assessment year of the municipality in which such person resides ...."

In Plastic Tooling Aids Laboratory, Inc. v. Commissioner, 213 Conn. 365, §369 (1990), the Court discussed "the principles of statutory construction that govern the availability of a tax exemption. First, statutes that provide exemptions from taxation are a matter of legislative grace that must be strictly construed against the taxpayer. Second, any ambiguity in the statutory formulation of an exemption must be resolved against the taxpayer. Third, the taxpayer must bear the burden of proving the error in an adverse assessment concerning an exemption."

With these principles in mind, Conn. Gen. Stat. §12-498(b)(1) requires that the "person approved for assistance", whose principal residence is being conveyed, be residing, as of the time of the conveyance, in the municipality where the principal residence is located. "The tax ... shall not apply to (1) deeds of the principal residence of any person approved for assistance under section 12-129b ... for the current assessment year of the municipality in which such person resides ...." Id. While it is true that the decedent at one time resided in the municipality in which her principal residence was located, it cannot be said that the decedent presently resides in the municipality or that the decedent presently has a principal residence in the municipality.

Whatever legislative purpose was served by the passage of 1985 Conn. Pub. Acts 159, §10, a very different purpose would be served by extending the benefit of this real estate conveyance tax exemption to a decedent's estate. Even the General Assembly extended property tax relief under Conn. Gen. Stat. §12-129b to the decedent only during her lifetime and, upon her death, terminated her estate's entitlement to such relief.

Accordingly, it is hereby ruled that the representative of a decedent's estate is not entitled to claim the exemption from the State real estate conveyance tax provided by Conn. Gen. Stat. §12-498(b)(1) when conveying what had been, at the time of the decedent's death, the decedent's principal residence.

LEGAL DIVISION

June 13, 1990