Bulletin 2023-01: Changes to the Peconic Bay Tax

The Towns of Shelter Island, East Hampton, Southampton and Southold have enacted the following changes to the Peconic Bay Community Preservation Fund ("Peconic Bay Tax"), effective April l , 2023:

The tax rate will increase from 2% to 2.5%
The allowances are increased to $400,000.00 (Improved) and $100,000 (Unimproved) for the Towns of Shelter Island, East Hampton and Southampton, and $200,000.00 (Improved) and $75,000 (Unimproved) for Southold
The allowances are eliminated for transfers over $2 million for the Towns of Shelter Island, East Hampton and Southampton
The purchase price limit for the exemption for first-time homebuyers in the Towns of East Hampton, Southampton, and Shelter Island are increased from 120% to 150% of the purchase price limit defined by the State of New York Mortgage Agency (SONYMA)

It is anticipated that the tax rate for closings occurring on or after April 1, 2023, where the contract was entered into prior to April 1, 2023, will likely not increase so long as a copy of the contract is submitted for review with the recording documents. However, official word has not yet been received and additional information will be provided in the near future.

Please note that Suffolk County initially issued guidance and a revised Peconic Bay Tax form requiring an application of the new allowances effective January 1, 2023 with an application of the new tax rate effective April 1, 2023. However, that guidance was revised January 10, 2023 to provide for an application of all changes effective April 1, 2023. Copies of both memos can be found here:

Peconic Bay December 27, 2022 Memorandum
Peconic Bay January 10, 2023 Memorandum

Also note that the revised guidance does not address the allowances or tax rate that will be applied for those transactions that closed during the period January 1, 2023 through January 10, 2023.

We will provide updates to the extent we receive future guidance concerning this open matter or anything else pertaining to the amendments to the Peconic Bay Tax.

In the event you have any questions regarding the above, please contact Johnny Hall, Underwriting Counsel, at 631.591.2267 or jhall@advantagetitle.com.