State CRE Guide

Connecticut Commercial Real Estate Loans: Taxes & C-PACE

What changes for a commercial property loan in Connecticut: the conveyance tax, entity transfers, court-run strict foreclosure and the Green Bank’s C-PACE.

By BestLoanUSA Updated October 11, 2026 4 min read

Connecticut at a glance for commercial property loans
What	Connecticut
State conveyance tax — commercial property	1.25% of the consideration for real property used for any purpose other than residential use, except unimproved land. The tax is paid by the grantor (the seller) when the deed is recorded. ^[1]
Municipal conveyance tax	0.25% in every town, plus up to another 0.25% in the 19 eligible municipalities (the targeted investment communities and one enterprise-zone town) that choose to impose it. ^[2]
Controlling-interest transfers	Selling or transferring a controlling interest — more than 50% — in an entity that owns Connecticut real property is taxed at 1.11% of the present true and actual value of that property, paid by the seller or transferor. Transfers within six months of each other are presumed to be one series. The return (Form AU-330) is due by the last day of the month after the transfer — for a series, after the month in which the transfers first exceed 50%. ^[3]
Foreclosure process	Judicial. A Connecticut court forecloses a mortgage either by strict foreclosure — title passes to the lender after the borrower’s redemption period (“law day”) expires, without a sale — or by ordering a foreclosure by sale. ^[4]
Deficiency after strict foreclosure	After a strict foreclosure, any party to the foreclosure may move for a deficiency judgment within 30 days after the time limited for redemption has expired. The court hears evidence of the property’s value and enters judgment for the difference between that value and the lender’s claim. The 30-day limit does not apply after a foreclosure by sale. ^[5]
C-PACE law and program	Conn. Gen. Stat. § 16a-40g sets up the commercial sustainable energy program run by the Connecticut Green Bank in participating municipalities. The owner repays through a benefit assessment collected like property taxes. The lien ranks ahead of all other liens except municipal property taxes, and the program requires the written consent of any existing mortgage holder. ^[6]

Checked 2026-10-11; sources are listed at the end of the page. Rates and rules change — your title company and closing attorney confirm the figures for a specific deal.

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Commercial property loans in Connecticut use the same programs as every other state — SBA 504, DSCR loans, bridge loans, bank and life-company permanent loans. What Connecticut changes is a conveyance tax on the sale with a separate town share, a second tax when an owner sells the entity instead of the building, a foreclosure process that runs entirely through the courts with a short deadline for a deficiency claim after strict foreclosure, and a C-PACE program run by the Connecticut Green Bank in the towns that opt in.

A two-part conveyance tax on the sale

Connecticut's real estate conveyance tax has a state share and a town share, both paid by the grantor — the seller — when the deed is recorded. For property used for anything other than a residence, except unimproved land, the state rate is a flat 1.25% of the price; the graduated rates you may have seen for Connecticut apply to homes. Every town adds 0.25%, and the 19 municipalities eligible for an increased rate — the targeted investment communities and one enterprise-zone town — may add up to another 0.25%. The tax is measured by the price, so the size of the loan does not change it.

Example: a $2,000,000 commercial building bought with a $1,400,000 loan.

State conveyance tax: $2,000,000 × 1.25% = $25,000
Town conveyance tax at 0.25%: $5,000 ($10,000 in a town that imposes the full 0.50%)
Total: $30,000 — or $35,000 at the higher town rate

That is more than the $21,700 in state taxes on the same purchase and loan in Florida, and less than the $36,637.50–$41,637.50 range in Washington. As in Washington, the seller carries it, so it shows up in the price a seller will accept rather than in the buyer's closing statement.

Connecticut also taxes a change of control. When more than 50% of an entity that owns Connecticut real property is sold or transferred, the seller or transferor owes 1.11% of the present true and actual value of that property, and transfers made within six months of each other are presumed to be one series. On a building worth $2,000,000 that is $22,200. If you plan to buy into a partnership, recapitalize or buy out a co-owner, count every transfer in the window before you sign, and file Form AU-330 by the end of the month after the transfers first add up to more than 50%.

Court-run foreclosure — and a 30-day deficiency window

Connecticut forecloses mortgages only through the courts, and under § 49-24 the court chooses between two paths. In a strict foreclosure, the court sets a redemption date — the "law day" — and if the debt isn't paid by then, title passes to the lender without any sale. In a foreclosure by sale, the court orders the property sold and the proceeds applied to the debt. Because a judge controls the timetable, a borrower in default deals with a court schedule rather than a trustee's notice clock.

The deficiency rule is what a business owner should know. After a strict foreclosure, § 49-14(a) gives any party 30 days after the redemption period expires to move for a deficiency judgment; the court then hears evidence of the property's value and enters judgment for the difference between that value and the lender's claim. That 30-day limit does not apply after a foreclosure by sale, which follows different rules. So the personal guarantee you sign on a Connecticut commercial loan should be read alongside that timeline — and on a non-recourse loan, read the carve-outs that would turn recourse back on.

C-PACE through the Connecticut Green Bank

Connecticut's C-PACE program comes from § 16a-40g, which created a commercial sustainable energy program run by the Connecticut Green Bank in municipalities that join it. Capital from the Green Bank or a third-party provider pays for energy improvements, and the owner repays through a benefit assessment that the town collects the same way it collects property taxes. The lien ranks ahead of every other lien except municipal property taxes, and the program requires the written consent of any existing mortgage holder. C-PACE Desk, a BestLoanUSA site, tracks Connecticut's C-PACE status. Check that your town participates, and bring your current lender in early — without its consent the financing can't close.

Where to start

Choose the program — SBA 504 for an owner-occupied building, a DSCR loan or permanent loan for an income property, a bridge loan for a transition — and work the conveyance tax into the price. Size the loan with the commercial mortgage calculator. For financing that isn't tied to real estate, the Connecticut business loan guide covers SBA offices and state programs.

Ready to compare? Start a commercial real estate loan request — one application, compared across our lender network.

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Sources: Conn. Gen. Stat. § 12-494 and Connecticut Office of Legislative Research report 2020-R-0020 (Real Estate Conveyance Tax); Conn. Gen. Stat. § 12-638b and Connecticut DRS Form AU-330 instructions; Conn. Gen. Stat. §§ 49-14 and 49-24; Conn. Gen. Stat. § 16a-40g as amended by Public Act 22-6. Checked 2026-10-11.

The bottom line

Connecticut taxes the sale, not the loan: on a $2,000,000 commercial building the state and town conveyance taxes come to $30,000, or $35,000 in a town that adds the extra 0.25%, and the seller pays. Selling more than half of the entity that owns the building is taxed too, at 1.11% of the property’s value. Foreclosure runs through the courts, often as strict foreclosure, and after a strict foreclosure a lender has only 30 days after the redemption period to ask for a deficiency — so read the guaranty with that timeline in mind. For energy work, ask whether your town has joined C-PACE and bring your current lender in early, because the program needs its written consent.

Commercial loan rates and terms in Connecticut

Rates and leverage come from the lender, the property and the borrower, so they are the same national ranges in Connecticut as elsewhere — what changes here are the closing costs and rules in the table above. Typical terms as of September 2026:

Program	Rate	Max LTV / LTC	Term
Bank / credit union	6.5–8%	65–75% (80% multifamily)	5–10 yr
SBA 504	6.25–7.25%	Up to 90%	10–25 yr
SBA 7(a)	8.5–11.5%	Up to 90%	Up to 25 yr
DSCR	6.75–8.75%	Up to 75–80%	5–30 yr
CMBS	7–8%	Up to 75%	5–10 yr
Bridge	6.25–8.25%	65–80%	12–36 mo
Construction	6.75–10.5%	65–80% LTC	12–24 mo

How each range is built: commercial real estate loan rates by type.

Connecticut commercial real estate loan FAQ

What are commercial mortgage rates in Connecticut?

Commercial lenders price a loan on the property and the borrower rather than the state, so Connecticut rates follow national ranges: about 6.5–8% for a bank loan, 6.25–7.25% for SBA 504, 6.75–8.75% for a DSCR loan and 6.25–8.25% for a bank or debt-fund bridge loan (benchmarks as of September 2026).

How much down payment do I need for a commercial property in Connecticut?

Typically 25–35% for a bank loan and 20–25% for a DSCR loan. An owner-occupied building can qualify for SBA 504 with 10% down (15% for a business under two years old or a special-purpose building, 20% if both).

What does Connecticut charge in tax on a commercial property sale?

The real estate conveyance tax: 1.25% to the state on commercial (non-residential, improved) property, plus 0.25% to the town — up to 0.50% in the 19 municipalities eligible for the extra rate that impose it. On a $2,000,000 sale that is $30,000, or $35,000 at the higher town rate. The seller (grantor) pays.

Does selling an LLC that owns Connecticut property trigger a tax?

Yes, if more than 50% of the entity changes hands. Connecticut’s controlling interest transfer tax is 1.11% of the present true and actual value of the entity’s Connecticut real property, paid by the seller or transferor, and transfers within six months of each other are presumed to be one series. The return is due by the last day of the month after the transfer — for a series, after the month in which the transfers first exceed 50%.

How long does a Connecticut lender have to seek a deficiency after a strict foreclosure?

Thirty days. After a strict foreclosure, a motion for a deficiency judgment must be filed within 30 days after the redemption period expires; the court then hears evidence of the property’s value and enters judgment for the difference between that value and the lender’s claim.

Sources

Checked 2026-10-11.