When purchasing real estate on the East End of Long Island, it’s crucial to understand all the costs involved—including a unique tax known as the Peconic Bay Region Community Preservation Fund (CPF) Tax. This tax supports land preservation, water quality initiatives, and community housing projects in the region. If you’re considering buying property in Suffolk County’s East End, here’s what you need to know about the CPF tax.

 

Where Does the Peconic Bay Community Preservation Fund Tax Tax Apply?

The CPF tax is levied on real estate transactions in the five East End towns of Suffolk County:

  • East Hampton
  • Shelter Island
  • Southampton
  • Southold
  • Riverhead

 

As of April 1, 2023, the tax rate increased from 2% to 2.5% in East Hampton, Shelter Island, Southampton, and Southold. Riverhead, however, continues to impose the original 2% tax rate.

 

How Much Will You Pay?

 

The CPF tax applies to the purchase price of real estate, but there are exemptions based on the property type and location. Here's a summary: 

  • East Hampton: $400,000 exemption for primary residences; no exemption for conveyances over $2,000,000.   
  • Riverhead: $150,000 exemption for primary residences; $75,000 for vacant land; no exemption for conveyances over $2,000,000.   
  • Shelter Island: $400,000 exemption for primary residences; $100,000 for vacant land; no exemption for conveyances over $2,000,000.   
  • Southampton: $400,000 exemption for primary residences; $100,000 for vacant land; no exemption for conveyances over $2,000,000.   
  • Southold: $200,000 exemption for primary residences; $75,000 for vacant land; no exemption for conveyances over $2,000,000.   

 

Who Pays the CPF Tax and When?

The CPF tax is paid by the buyer at the time of closing. This means it’s an additional cost to factor into your budget when purchasing a home or land in these areas. The tax is collected by the county and allocated directly to the Community Preservation Fund.

 

What is the purpose of the CPF Tax?

The revenue from the CPF tax plays a vital role in preserving the natural beauty and environmental integrity of the East End. Funds collected have been used to:

  • Preserve open space and farmland
  • Protect drinking water supplies and coastal ecosystems
  • Improve water quality through conservation programs
  • Support affordable housing projects for local residents

 

Final Thoughts

If you’re planning to buy property in the Peconic Bay region, understanding the CPF tax is essential. While it adds to the upfront costs of purchasing real estate, it ultimately helps maintain the region’s charm, environmental quality, and sustainability for future generations.

 

Need Help Navigating Your Real Estate Purchase? If you have questions about how the CPF tax affects your home purchase or need guidance in finding the perfect property, Educators Realty is here to help. Contact us today to make your real estate experience smooth and stress-free!