Peconic Bay Transfer Tax Amendment: Exemption for First Time Home buyers and Certain Not-for-Profit Corporations in Southampton, East Hampton and Shelter Island

On July 21, 2008, New York State Governor Paterson signed Chapter 349 into law. The new legislation, which is effective immediately, creates an exemption from the Peconic Bay Region Community Preservation Fund transfer tax in the towns of Southampton, East Hampton and Shelter Island for qualifying first time homebuyers and for certain not-for-profit corporations. The exemption applies only, as to individual purchasers, if the property is a one or two family house, townhouse or condominium which is to be owner occupied by the homebuyer, and if the purchase price and income of the first time homebuyers fall within certain limits. If the purchaser is a qualifying not-for-profit corporation, the exemption applies to any real property which will provide housing under the conditions stated in the legislation.*

We have been advised that the following procedures will be in effect (these are subject to change until finalized):

In order to obtain the exemption, the purchaser must apply to the appropriate town PRIOR TO CLOSING by submitting an application on the town supplied form, together with a copy of their latest income tax return and a copy of the contract of sale. Upon determining that the requirements have been met, the town official will sign Part II (Explanation of Exemption) on the Peconic Bay Region Community Preservation Fund transfer tax return as well as the town form granting this new exemption. BOTH forms must be submitted to the County Clerk in order for the deed to be recorded without the payment of the Peconic Bay Region transfer tax. If the two forms are not presented to your closer at closing, we must collect the Peconic Bay Transfer Tax. We do not know if the town(s) will permit the buyer to apply for a refund if the tax is paid prior to receiving an exemption.

The Peconic Bay Region Community Preservation Fund transfer tax form has been amended. The amended form must be used for all closings starting immediately. The amended Peconic Bay Region Transfer Tax form is available here.

The transfer tax form MUST be printed on 8.5 x 14 paper or it will be rejected by the county clerk. Please note that transfers of properties in Southold and Riverhead will not receive the exemption; however, the county requires the use of the new Peconic Bay form.

With regard to the exemption forms required at the town level, please find the following forms, brochures and checklists made available by each respective town:





If you have any questions, please contact Felix Tschanz at felix@advantagetitle.com or 631.424.6100.