CPF Tax Explained

Community Preservation Fund

The 2% transfer tax is paid by the purchaser at closing on all title transfers with the following exemptions:

  • The first $250,000 is exempt from the tax on improved residential property -i.e. with house already built on the land. (in Southampton, East Hampton and Shelter Island)/ $150,000 (in Southold and Riverhead) of the purchase price of a house or building.

  • The first $100,000 is exempt from the tax on unimproved residential property. (in Southampton, East Hampton and Shelter Island) /$75,000 (in Southold and Riverhead).

  • Farmer to farmer real estate transfers and;

  • Land purchases by entities such as the Peconic Land Trust and The Nature Conservancy.

In the Fall of 1998, 350 years after East Hampton’s founding, voters in each of the five East End Towns (East Hampton, Southampton, Shelter Island, Riverhead and Southold) overwhelmingly approved a Community Preservation Fund that would use a 2% tax on the transfer of real estate to buy open space and the development rights to farmland in order to preserve the environment, physical beauty, and rural quality of life in eastern Long Island for all time.

Officially called the Peconic Bay Region Community Preservation Fund, the development of the Community Preservation Fund (CPF) is surely one of the most important events in East Hampton’s history—from the time Connecticut farmers and fishermen, originally from Maidstone in East Anglia in England, settled here in 1648 to the present.

Money raised in a town stays in the town in which the real estate transfer tax is levied and is used to purchase open space, farmland, and certain historic structures. Under certain circumstances, CPF money may be used for community recreational purposes. In its first decade, tens of millions of CPF dollars have been collected and utilized to spare thousands of acres from development. By protecting property values, this is a savings account for taxpayers.

The remarkable combination of East Hampton’s openness, its farmlands and forests, its bays, harbors, ponds and magnificent beaches, its beautiful vistas, close-to-nature-trails, the soul satisfying sounds of surf, and the smells of fresh sea air combine to make it captivating. The Community Preservation Fund is designed, and legislated, to protect these environmental treasures.

Nearly 40 percent of East Hampton’s 70 square miles are now in public ownership – most of it preserved as open space.

While no one enjoys paying taxes, the Community Preservation Fund should have the effect of increasing everyone’s property values over the long run. Without such an effort, we are in jeopardy of becoming over-developed and losing our uniqueness.

*Text from: ©2013 East Hampton Conservators