Peconic Bay Transfer Tax: What East End Long Island Buyers Need to Know

If you're buying property in the Hamptons, North Fork wine country, or anywhere else on Long Island's East End, you'll encounter a transfer tax that doesn't exist anywhere else in New York. The Peconic Bay Community Preservation Fund tax is a local real estate transfer surcharge that adds materially to your closing costs — and it surprises buyers who've only researched standard New York State transfer tax rates.

Here's how it works and what it will cost you.

What the Peconic Bay Transfer Tax Is

The Peconic Bay Community Preservation Fund (CPF) was established by New York State in 1998 to fund the preservation of open space, farmland, historic properties, and recreational areas in the five East End towns of Suffolk County. The fund is financed by a real estate transfer tax on property sales within those municipalities.

The CPF tax is a 2% surcharge on the purchase price, levied on the buyer. It is paid at closing in addition to the standard New York State transfer tax (0.4%, paid by the seller in a standard resale).

Which Towns and Villages Charge the Peconic Bay Transfer Tax

The CPF tax applies in the following five East End towns (and all incorporated villages within them):

• Town of East Hampton (including East Hampton Village, Sag Harbor, Montauk, Springs, Amagansett, Wainscott, etc.)
• Town of Southampton (including Southampton Village, Bridgehampton, Sag Harbor, Water Mill, Sagaponack, Westhampton Beach, etc.)
• Town of Shelter Island
• Town of Riverhead (including Jamesport, Aquebogue, Calverton, etc.)
• Town of Southold (including Greenport, Mattituck, Cutchogue, Southold Village, Orient, etc.)

Note that Sag Harbor straddles both East Hampton and Southampton — the CPF tax applies throughout.

Most of western Suffolk County and all of Nassau County are not subject to the CPF tax.

How Much Will You Pay?

The Peconic Bay CPF tax is 2% of the purchase price, paid by the buyer. Unlike the NYC mansion tax, there is no minimum price threshold — it applies from the first dollar.

Examples:

On a $1.5 million home in Southampton, the CPF tax alone is $30,000 — due at closing, in cash, on top of your down payment, attorney fees, title insurance, and any applicable NYC mansion tax (which applies to purchases of $1 million or more statewide, including East End).

Exemptions from the Peconic Bay Transfer Tax

There are limited exemptions. The most relevant for first-time buyers is the first-time buyer exemption for affordable housing transactions. The specifics of this exemption vary by town and program — buyers must be purchasing a primary residence and meet income limits. Ask your attorney whether any applicable exemption applies to your transaction.

Agricultural and other specific land use exemptions also exist for qualifying properties, but these are not relevant for most residential buyers.

Who Pays It and When

The Peconic Bay CPF tax is the buyer's responsibility. It's collected at the closing table alongside other transfer taxes and recording fees, typically handled by the title closer.

The seller pays the standard New York State transfer tax (0.4%). The buyer pays the Peconic Bay 2%. Both are due at closing.

How This Affects Your Closing Cost Budget

If you're comparing the cost of buying on the East End versus elsewhere in New York, the Peconic Bay transfer tax is a material differentiator.

A buyer purchasing a $700,000 home in Nassau County (not subject to the CPF tax) would pay no Peconic Bay tax and might have total closing costs of $15,000 to $20,000 including MRT, title, and attorney.

A buyer purchasing a $700,000 home in Southold or Southampton pays the same standard costs plus $14,000 in Peconic Bay CPF tax, pushing total closing costs closer to $29,000 to $34,000.

Factor this explicitly into your affordability calculation before falling in love with a specific East End property. Real estate agents quoting estimated closing costs in these markets don't always lead with the CPF tax — make sure your attorney includes it in your closing cost estimate from the start.

The CPF Tax and East End Market Dynamics

The East End real estate market has some of the highest median prices in New York State. The Peconic Bay CPF tax has not materially suppressed prices — demand for Hamptons, North Fork, and Shelter Island properties has remained strong — but it does represent a genuine friction for entry-level buyers in these markets.

For buyers using financing, the CPF tax cannot be rolled into a mortgage. It requires cash at closing. On a $600,000 purchase with 10% down, you'd need $60,000 for the down payment, $12,000 for the Peconic Bay tax, and another $12,000 to $16,000 for other closing costs — approximately $84,000 to $88,000 in total cash before you own anything.

The East End of Long Island has some of New York's most desirable real estate — and some of its most expensive closing costs. The New York First-Time Home Buyer Guide covers the full closing cost structure for buyers across all regions of New York State, including the specific taxes and fees that apply in each market.

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