Peconic CPF: how the tax and its exemptions work.
The Peconic Bay Community Preservation Fund tax (Town Law §64-e) is the largest single buyer-side closing cost on most Hamptons purchases. It is 2.0% to 2.5% of the price, buyer-paid at closing. In East Hampton, Southampton and Shelter Island the first $400,000 of an improved parcel is exempt, but only when the price is $2M or less. At $5M, the CPF is $125,000.
Revised October 2026. An earlier version of this page described additional exemptions based on assessed improvement value and primary residence. We could not support those from the statute or the towns’ published guidance, and they have been removed.
Rate and exemption by town.
| Town | Rate | Improved-parcel exemption |
|---|---|---|
| East Hampton | 2.5% | $400,000, price $2M or less |
| Southampton | 2.5% | $400,000, price $2M or less |
| Shelter Island | 2.5% | $400,000, price $2M or less |
| Southold | 2.5% | $200,000, price $2M or less |
| Riverhead | 2.0% | $150,000, any price |
The 2.5% rate is the original 2% CPF tax plus a 0.5% Community Housing Fund tax that voters in four of the five towns approved in 2022. Vacant land carries a smaller exemption than an improved parcel ($100,000 in East Hampton, Shelter Island and Southampton; $75,000 in Southold and Riverhead). Riverhead did not adopt the housing-fund tax, so its rate stays at 2.0%, and its town code (§221-18) puts no $2M limit on the $150,000 allowance. Southold’s $200,000 allowance is subject to the limit (Southold Town Code §17-25(C), added in 2023).
The limit is stated as “two million dollars or less” (Tax Law §1449-ee(3)(c)), so a $2,000,000 purchase still receives the exemption and a $2,000,001 purchase does not.
Sources: NY Tax Law §1449-ee(3); Southold Town Code §17-25; Riverhead Town Code §221-18; Town of Southampton CPF and Community Housing Fund FAQ; Stewart Title bulletin on the April 1, 2023 Peconic Bay changes; Town Law §64-e.
Above $2M, there is no exemption.
The statute says the exemption applies only where the consideration is “two million dollars or less” (Tax Law §1449-ee(3)(c)), and the Town of Southampton states it the same way. Cross the line by a dollar and the tax runs on the full price, not the price less $400,000.
The effect is a step, not a phase-out. In Southampton, a $2,000,000 purchase carries $40,000 of CPF. A $2,010,000 purchase carries $50,250. A buyer pays an extra $10,250 for $10,000 of additional price.
For sellers, that makes $2,000,000 a real price point. Buyers shopping just under it are comparing a number that is about $10,000 cheaper in closing taxes.
What the tax comes to.
All three assume an improved parcel in Southampton or East Hampton, an ordinary arm’s-length purchase, and no special exemption.
$1.5M purchase
2.5% × ($1,500,000 − $400,000) = $27,500. The exemption is worth $10,000.
$5M Bridgehampton purchase
2.5% × $5,000,000 = $125,000. The exemption does not apply.
$15M East Hampton purchase
2.5% × $15,000,000 = $375,000.
Specific exempt transfers exist. Ask counsel which apply.
Beyond the standard exemption, the towns list specific exempt transfers on the CPF form. The Town of Southampton, for example, points to Section C of the form, and its page mentions a first-time home buyer exemption. The categories, eligibility rules and price limits differ by town and have been amended, so we do not summarize them here.
Before contract, ask closing counsel to run the full CPF computation for the specific town, price and buyer, and to say in writing which exemptions apply and why. Don’t build a purchase price around an exemption that has not been confirmed for your transaction.
Holding structure can matter. Whether a later transfer, such as a gift to a family member or a change in LLC ownership, is taxable or exempt depends on the town’s rules and the form of the transfer. Raise it with counsel at purchase, not at transfer.
For your Hamptons purchase.
- Run the standard CPF math on your scenario with the Hamptons buyer calculator.
- If the price is near $2M, price the offer with the $10,000 step in mind.
- Have closing counsel confirm the computation and any exemption before contract.
- Read the Hamptons buyer guide for the broader transaction framework.
Planning a Hamptons purchase?
Send the town and your price range. We’ll model the CPF and the other closing costs, and work through the open questions with you and a Compass East End specialist.
The Roebling Team at Compass is led by Corey Cohen, a New York licensed associate real estate broker, and concentrated in Manhattan. For Hamptons transactions we typically work alongside Compass agents who specialize in the East End, so you have local expertise on inventory and pricing while the analysis stays consistent with your New York City holdings. This page and its calculators are research, not an offer of representation.
For a sale or purchase in Hamptons, or a move that involves both Manhattan and Hamptons, schedule a consultation; where appropriate we’ll introduce you to a vetted Compass agent who specializes in the East End.