Upcoming Changes to the Peconic Bay Region Transfer Tax

Expected Effective Date: April 1, 2023

There are five (5) towns within the Peconic Bay region: East Hampton, Riverhead, Shelter Island, Southampton, and Southold. Currently, conveyances within these towns are subject to a local transfer tax known as the Peconic Bay Region Community Preservation Fund (“Peconic CPF”). The Peconic CPF helps to subsidize open space preservation and water quality protection programs in the region. The current tax rate is 2% of consideration after certain allowances/exemptions (hereinafter “exemptions”). See, Article 31-D of the NYS Tax Law.

Pursuant to the Laws of 2021, chapter 445, effective October 8, 2021 (Assembly bill A2633), as codified in Town Law § 64-k, towns of the Peconic Bay region were given the option and authority to establish a dedicated fund to provide needed housing opportunities within the Peconic region, known as the “Peconic Bay Region Community Housing Fund”. The funding for this housing project will be derived in part from the imposition of a supplemental real estate transfer tax of 0.5% of the consideration, which will be in addition to the existing 2% collected for the Peconic CPF. In the hopes of mitigating any adverse impact from this new supplemental transfer tax, increases will be made to certain exemption amounts, as well as increases to certain purchase price limits as it relates to each town’s first-time homebuyer exemption criteria.

Currently, the Town of Riverhead is the only town that has opted out of this supplemental tax and therefore has not amended its current exemption amounts.

The following is provided based on information currently available:

Applies to conveyances occurring on or after April 1, 2023: The 0.5% supplemental Peconic Bay Region Community Housing Fund transfer tax shall apply to conveyances occurring on or after April 1, 2023, but shall not apply to conveyances made on or after such date pursuant to binding written contracts entered into prior to such date, provided that the date of the execution of such contract is confirmed by independent evidence such as the recording of the contract, payment of a deposit, or other facts and circumstances as determined by the Suffolk County Treasurer. This supplemental tax shall be administered and collected just like the Peconic CPF.

New Peconic transfer tax form: A new Peconic transfer tax form will be issued, hopefully well before April 1, 2023. The Suffolk County Clerk will still require it be printed and executed on unreduced legal size paper (8.5” x 14”).

Exemption amounts and new restrictions as to property type and amount: