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Tax Break for First-time Homebuyers in Town of Southold

John A. Viteritti

Tucked in a cove, this spot on the North Fork, listed by Gary R. DePersia of The Corcoran Group, is simply idyllic. (Courtesty Photo)

Supervisor Scott Russell stated, "The Southold Housing Advisory Commission made this sensible recommendation to the Town Board and the ability to assist year-round residents who are first-time homebuyers is important and meaningful."

What Mr. Russell is referring to is an exemption from the Community Preservation Fund Transfer Tax that went into effect in 2000 on all transfers of real property within the five towns of Eastern Long Island. In Southold and Riverhead, the tax is 2% on transfers of unimproved property over $75,000, and improved property over $150,000, paid at the closing. In Shelter Island, Southampton, and East Hampton, the tax is 2% on transfers of unimproved properties over $100,000, and improved properties over $250,000. While either the buyer or seller may pay the tax, it is typically paid by the buyer.

Since 2008, qualified first-time homebuyers in Shelter Island, Southampton, and East Hampton whose household income did not exceeded $126,000 and the price of the home did not exceed $734,000 were eligible for the exemption. According to Philip Beltz, Special Projects Coordinator for the Town of Southold, effective September 23, 2014, qualified first-time homebuyers in the Town of Southold whose household incomes do not exceed $126,120 and prices of the home do not exceed $367,140, will be eligible for the exemption.

In the Towns that have already allowed the exemption, a purchaser could avoid having to pay the tax at closing by having made application after a signed contract to purchase the property had been entered into and before closing. It is also possible to apply retroactively for the exemption. Anyone desiring information about how the Town of Southold will process requests for the exemption should contact Mr. Beltz at 631-765-5806.

Before the proposed exemption was submitted to the Town Board and State Legislature for approval, the Housing Advisory Commission did an analysis of past purchases to determine the possible savings to qualified buyers at what cost to the Community Preservation Fund. It showed that the typical buyer would have saved approximately $2,000 in closing costs at a cost of approximately 3% to the Fund. The Commission, and subsequently the Town Board and Peconic Bay State legislators, Fred Thiele, Kenneth LaValle, and Anthony Palumbo, felt that the opportunity to assist buyers who wanted to live in Southold justified the loss of revenue, especially in light of the need for affordable housing.

While this step effort will not, in itself, provide sufficient opportunities for those families who choose to live and work in Southold, it is a step forward.


John is a St. John's University graduate, licensed Real Estate broker, lecturer, teaches real estate license classes at LIU, NYU, and Cook Maran Real Estate School, and is a well-respected consultant to the real estate industry. www.johnaviteritti.com





Added: October 13, 2014, 7:42 am
www.hamptons.com/Real-Estate/Real-Estate-News/20170/Tax-Break-for-First-time-Homebuyers-in-Town-of.html
Appeared In: real estate >> real estate news