State lawmakers passed a tax break for first-time homebuyers in Southold Town last week, exempting them from paying the 2 percent Community Preservation Fund tax on mortgages.
But don’t expect the same in Riverhead anytime soon.
The New York State Assembly and Senate both approved the tax relief bill sponsored by state Senator Ken LaValle (R-Port Jefferson) in the upper house, and Assemblyman Anthony Palumbo (R-New Suffolk) in the lower house last week.
The legislation aims to help low and moderate-income residents purchase their first home by eliminating certain income requirements and exempting them from the 2 percent real estate transfer tax that funds the Peconic Bay Community Preservation Fund, which is a conservation program designed to preserve open space and farmland in the five East End townships. The tax is levied on the cost of the mortgage taken out to buy homes.
Mr. Palumbo said Friday he hopes the law ends the current trend of younger residents leaving Southold Town.
“It is certainly no secret that taxes are of greatest concern to Long Islanders,” he said. “The out migration of 18-to-25-year olds is staggering in the Town of Southold, and in general Suffolk County. We need to provide all the relief we can.”
Southold Town is the latest East End municipality to benefit from the tax exemption. Southampton, East Hampton and Shelter Island also currently offer the tax break.
Riverhead is the only East End town without the first-time homebuyers’ exemption.
Riverhead Town Supervisor Sean Walter said it’s unlikely the same tax relief will be available in Riverhead in the near future due to the town’s long-term debt. Riverhead, unlike Southold, borrowed against future CPF revenues several times over the past decade, allowing the town to buy up land using the borrowed funds. So the town now owes between $5 million and $6 million through 2020, though revenues are closer to the $2 million to $3 million range.
So, no room in Riverhead to offer the exemption to first-time buyers. At least for now.
“I would love to have it, but it is not something the town is in a financial position to do,” he said. “Unless revenue increases dramatically, I don’t see it happening anytime soon.”