Peconic Tax, What is it and who pays it?
The Peconic Tax is basically a real estate transfer tax based on the purchase price of property. The towns of Riverhead, East & Southampton, Southold and Shelter Island are all subject to what we call the “Peconic Tax”.
Note: Currently, there is a First Time Home Buyers Exemption for all townships except Riverhead.
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This tax was designed to raise money to help preserve “open spaces”. It helps to protect farms, wetlands and historical sites. The towns use the monies raised to purchase development rights to help keep these “open spaces” from being built on.
Here’s how the tax works:
If you are buying in the town of Riverhead and/or Southold, the first $150,000 of the purchase price of improved land is exempt from the tax. Purchaser would pay 2% of the remainder of the purchase to the township at closing.
For Example: (In Riverhead and/or Southold) Price is $530,000, we would subtract the $150,000 exemption and pay the 2% tax on the remaining $380,000 for a total tax payment of $7600.
If you are buying in East Hampton, Southampton and/or Shelter Island, the first $250,000 is exempt from the tax. Purchaser would pay 2% of the remainder of the purchase to the township at closing.
For Example: (In East Hampton, Southampton and/or Shelter Island) Purchase Price is $530,000, we would subtract the $250,000 exemption and pay the 2% tax on the remaining $280,000 for a total tax payment of $5600.
(The exemptions are $75,000/$100,000 for vacant land.)
For more information:
East Hampton: 631.324.7420 Town of East Hampton
Shelter Island: 631.749.1080 Town of Shelter Island
Southampton: 631.287.5720 Town of South Hampton
Southold: 631.765.5711 Town of Southold
Riverhead: 631.727.3200 Town of Riverhead