Peconic Bay Tax (CPF)
This week we wanted to remind you about current legislation that will affect how the Peconic Bay Community Preservation Fund Tax (CPF) is calculated in several Peconic Bay towns in Eastern Long Island. Effective January 1, 2023, pursuant to revisions to New York Tax Law 1449-BB and the local town codes in East Hampton, Shelter Island, South Hampton and Southold (NOTE – The town of Riverhead did not change its CPF allowances), all conveyances made in those towns will be subject to the following adjusted allowances when calculating the CPF:
East Hampton- $400,000.00- Improved; $100,000.00 Vacant (Unimproved)
No exemption on conveyances $2,000,000 or greater.
Shelter Island- $400,000.00- Improved; $100,000.00 Vacant (Unimproved)
No exemption on conveyances $2,000,000 or greater.
Southampton-$400,000.00- Improved; $100,000.00 Vacant (Unimproved)
No exemption on conveyances greater than $2,000,000.00.
Riverhead- $150,000.00- Improved; $75,000.00 Vacant (Unimproved)(NOTE – These Allowances remain unchanged by new legislation)
Southold-$200,000.00- Improved; $75,000.00 Vacant (Unimproved)
At present, unless the transaction qualifies for one of the exemptions set forth in Schedule C of the Tax Form or the Grantee qualifies for a First Time Homebuyer Exemption as set forth in https://codes.findlaw.com/ny/tax-law/tax-sect-1449-ee.html, the CPF paid by the Grantee acquiring real property in the above towns is calculated as follows:
Purchase Price - the applicable allowance X 2.00% tax rate. Please note that the new legislation provides for an increase in the CPF tax rate to 2.50% effective on April 1, 2023.
Please calendar that date so that you will be sure to use the correct tax rate for any of your Peconic Bay transactions that close on or after April 1, 2023.
As an example, the CPF paid by the Grantee for the purchase of a 1 Family property in East Hampton on January 25, 2023, for $1,500,000.00 would be calculated as follows:
$1,500,000.00 - $400,000.00 x 2.00% = $22,000.00
If that same transaction closed on April 15, 2023, the CPF paid by Grantee would be $1,500,000.00 - $400,000.00 x 2.50% = $27,500.00
Click the below link for the Peconic Bay Region Community Tax Form:
https://www.southamptontownny.gov/DocumentCenter/View/189/Peconic-Bay-Region?bidId=
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