The five East End towns of the Peconic Bay Region in Suffolk County, New York are East Hampton, Shelter Island, Southampton, Riverhead, and Southold. When purchasing a home in this region, a purchaser will pay a one-time transfer tax called the Peconic Bay Region Community Preservation Fund (or CPF), (“Peconic Bay Tax”). Up until recently, the Peconic Bay Tax has been 2% of the purchase price of any home or lot after certain allowances.
In the fall of 2021, Governor Hochul signed The Peconic Bay Region Community Housing Act, which increases the Purchaser paid Peconic Bay Tax due at real estate transfers and will create an Affordable Housing fund.
Under the new legislation, effective on April 1, 2023, all transfers in the Peconic Bay Region on or after April 1, 2023, with the exception of Riverhead, will be subject to an increased Peconic Bay tax of .5%. Along with this increase will be an amended CPF form to be used on all transfers on or after April 1, 2023. This form may be accessed on the Suffolk County Clerk’s website.
Additionally, the new legislation increases certain allowances on all transfers occurring on or after April 1, 2023. The allowances are: In East Hampton, Shelter Island, and Southampton, $400,000.00 Improved, $100,000.00 Vacant (unimproved), and no exemption on conveyances $2,000,000.00 or greater. In Riverhead, $150,000.00 Improved and $75,000.00 Vacant (unimproved). In Southold, $200,000.00 Improved and $75,000.00 Vacant (unimproved).
The original tax was created to assist in preserving the vast undeveloped open spaces, wetlands, and natural vistas found in the Hamptons and North Fork. The new increase will go towards community housing, housing counseling, and assisting first-time homebuyers financially, among other things.
Rosemary Liuzzo Mohamed is a Partner at Adam Leitman Bailey, P.C. and the Chair of the Mortgage Finance Group.