A 2% transfer tax is paid by the buyer for each East End real estate closing and the money is sent to the town where the property is located. The Peconic Bay Region Community Preservation Fund (CPF) is a public program managed by each of the East End Towns for the protection of farmland, open space and community character including historic structures.
The CPF was established by voter referendum in 1998, when voters in the five towns (East Hampton, Riverhead, Shelter Island, Southampton and Southold) approved a new real estate transfer tax of 2% on each transaction occurring in these towns. This is a one-time tax that the buyer of real estate is required to pay when purchasing improved property or vacant land. The first $250,000 in East Hampton, Southampton and Shelter Island, and $150,000 in Riverhead and Southold of the purchase price of improved property and $100,000 and $75,000 for unimproved land, is exempt from the tax. In 2016, voters in all five towns approved a third referendum, extending the collection of the tax through 2050 and giving each town the opportunity to invest up to 20% of the CPF revenues in water quality projects.
First time homebuyers are exempt from the tax (except Riverhead). The exemption applies to property purchased as a primary residence by one or more persons, each of whom is a first-time homebuyer, provided that certain criteria regarding household income and the purchase price are met.
There is a CPF Advisory Board, composed of citizens from each town, that makes recommendations on acquisitions to the respective town boards. For more information see references below or contact Southold Town, Suffolk County or New York State.
Sources: www.SoutholdTownNY.org; www.PeconicLandTrust.org; https://suffolklaw.com/the-first-time-homebuyer-exemption-to-the-peconic-bay-real-estate-transfer-tax