Peconic Land Tax

"Peconic Bay Region Community Preservation Fund"

aka Community Preservation Fund (2% real estate transfer fee)

In 1998, the five East End towns (East Hampton, Riverhead, Shelter Island, Southampton, and Southold) obtained from NY State's legislature the right to bring forward a new real estate transfer tax of 2% on each real estate transaction occurring in these towns.  An extensive coalition of farmers, business leaders, environmentalists, realtors, builders, baymen, and civic and community leaders across the region pushed for the creation of this Community Preservation Fund.  In 1998, the voters approved a referendum creating the Community Preservation Fund, which is a conservation program to preserve open space and farmland in the five East End townships.  This fund is financed by a 2% tax on real estate sales.  This is a one-time tax that the buyer of real estate is required to pay when purchasing a new or used home or vacant property.  (In 2006, voters in all five townships approved a referendum to extend the collection of the tax from 2020 to 2030).

This program has been highly successful.  More than 6,000 acres of land have been protected that otherwise would have been lost to development.  The Community Preservation Fund:

  • helps implement key land protection recommendations from a ten-year study to improve and restore the Peconic Estuary;
  • has been used to purchase open space and environmentally sensitive lands as a way to protect the quality of drinking water;
  • has been used to protect the water quality in the Peconic bays and local harbors and bays;
  • enables towns to continue to purchase development rights on farmland, thereby preserving the farms that produce fresh fruit and vegetables, and a traditional way of life on the East End.

In the long run, the Community Preservation Fund also helps to keep taxes down.  When property is left undeveloped there is no such demand for more public services such as water, police, schools, and roads.  Important elements of the law are:

  • the first $250,000 of the purchase price of a house or building (the first $100,000 for unimproved land) is exempt from the real estate transfer fee;
  • a bipartisan advisory committee, composed of citizens from each town, oversees the program;
  • farmer-to-farmer exemptions are provided for in the law;
  • the buyer pays the tax;
  • money raised in a town stays in the town in which the real estate transfer fee is levied and is used to protect open space and farmland in that town only. 

Click here to view the Peconic Land Trust website.  If you have additional questions about the Peconic Land Tax and how if affects your home purchase in the Hamptons, please contact Chad at 631.946.3330.