Legislation that would have authorized the five East End towns to establish affordable housing funds financed by a new real estate transfer tax of .5% was vetoed by Gov. Andrew Cuomo Friday.
The bill, which easily passed both chambers of the State Legislature in June with bipartisan support, was drafted by Assemblyman Fred Thiele (I-Sag Harbor) and sponsored in the State Senate by Sen. Ken LaValle (R-Port Jefferson).
Though the bill would have added a .5% transfer tax to be paid by the buyer, it would have also increased exemption amounts for for the transfer tax — currently 2% on amounts over $150,000 in the towns of Riverhead and Southold. The exemption would have been raised to $280,000 in Riverhead and Southold. The exemption would have been raised to $400,000 from $250,000 in the towns of Southampton, East Hampton and Shelter Island.
The net result was a reduction in the transfer tax payable for all transactions of $800,000 or less in Riverhead or Southold, Thiele said.
“This would represent a tax cut for about 60% of all real estate sales on the East End,” according to Thiele, who also authored the original Peconic Bay Region Community Preservation Fund law in 1997. That law established a fund to preserve land for agriculture and open space and since its inception has raised more than $1.5 billion.
Thiele estimated that the Community Housing Fund tax would have generated $15 million to $20 million annually for affordable housing on the East End.
“The housing fund bill would have fairly placed the financial burden for affordable housing on the luxury, second-home market that has driven up housing costs for local families in the first place,” Thiele said in a press release. “Still, for example, the new law would have only added $15,000 to the purchase of a $2 million home.”
The bill, had it been signed by the governor, would have been subject to a mandatory referendum at the general election next November.
Thiele said the Community Preservation Fund bill was also vetoed by then-governor George Pataki the first time the bill was passed in 1997.
“We worked with the governor cooperatively to pass the bill the following year,” he said. “I am committed to working with the governor’s office on affordable housing, just as I did 22 years ago on land preservation, to pass this legislation in 2020.”
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