First time homebuyers looking to purchase a house in Southold Town will receive a break on their closing costs under a new state law.
On Wednesday, Gov. Andrew Cuomo signed new legislation designed to assist moderate-income residents purchase of their first home by eliminating one of the costs associated with closing: namely the 2 percent real estate transfer tax that funds the Peconic Bay Community Preservation Fund.
The CPF 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 purchase price taken out to buy homes.
In June, the New York State Assembly and Senate both approved the tax relief bill. The bill was sponsored by state Sen. Ken LaValle (R-Port Jefferson) in the upper house, and Assemblyman Anthony Palumbo (R-New Suffolk) in the lower house.
Mr. Palumbo said Wednesday he hopes the law curbs the trend of younger residents leaving Southold Town due to its high cost of living.
“This is a big step for moderate income families,” Mr. Palumbo said. “The elimination of this tax will allow for families with moderate incomes to pursue home ownership. Offering families with the incentives to stay on the Island will help mitigate the exodus of residents looking for lower living costs off the island and out of state.”
“This new law will enable our young residents more opportunities to purchase a first home on Long Island, near their families,” Mr. LaValle said in a statement. “Additionally, it will help our local businesses retain good employees. These are key elements necessary to keep Long Island a great place to live, work and raise a family.”
The maximum household income to take part in the exemption is approximately $126,000, with the maximum home purchase price presently estimated at $367,140, according to the law.
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.