Property owners in Connecticut may soon be subject to a tax on certain commercial properties that remain vacant for more than six months. Connecticut Senate Bill 363 proposes a maximum $5.00 per square foot tax on commercial properties that are unoccupied for 180 consecutive or cumulative days. “Act Allowing Municipalities to Impose Commercial Vacancy Assessments,” if approved by the House of Representatives and signed by Gov. Ned Lamont, would then need to be codified by local municipalities by ordinance.
Under the proposed bill, municipalities could impose assessments on any real property that is vacant and located in a zone that allows for commercial use, is not used for any residential purpose, is located at ground level if such property is part of a structure containing two or more levels, and is located in a defined area adopted by the municipality where such assessment would be applicable. It is not clear if the proposal applies to mixed-use properties.
The rate of assessment would be determined by the municipality, but could not exceed $5.00 per square foot, as currently drafted. By way of example, should the legislation become effective, a 1,400 sq. ft. commercial space that is vacant for the 180 days would be subject to a $7,000 tax. Assessments would be due on the date real property taxes are collected, and such assessments could be appealed pursuant to Connecticut General Statutes Sec. 12-111. Funds collected would be earmarked for deposit in a municipal fund to be used solely for infrastructure improvements, blight remediation or promotion of development in an area defined by the municipality.
Exceptions to the assessment have also been proposed, so that a property owner can avoid the assessment. The exceptions are: if an owner is engaged in renovations, if a permit application is pending, if the owner identifies a legal or regulatory barrier (i.e. pending litigation, environmental reviews or permitting delays), or the property has been impacted by natural disaster or deemed uninhabitable by local or state authorities.
At least one municipal land use board has endorsed the concept. The City of Norwalk Planning & Zoning Commission at its April 8, 2026, meeting, directed city zoning staff to draft a memorandum of support for the proposal. The Norwalk City Council President Josh Goldstein has also endorsed the concept, stating it is, “not a punishment, but an incentive for landlords to get paying tenants or sell to someone who will.” The Connecticut Conference of Municipalities, the town of Harwinton, the New Britain Downtown District, First Town Downtown District of Windsor, and the Connecticut Main Street Center submitted testimony in support of the legislation.
But testimony at a recent public hearing, including by Connecticut Realtors, an organization of more than 18,000 members and others, suggested that the assessment is a punitive tax on small business owners.
For more information, please contact Carmody’s Real Estate & Land Use lawyers:
Liz Suchy
Partner
203.252.2656
[email protected]
This information is for educational purposes only, to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.