A 2% real estate transfer tax generated Riverhead Town $4.63 million in the first half of 2024 for its land preservation and water quality projects, according to Assembly Member Fred Thiele.
The Peconic Bay Region Real Estate Transfer Tax generated $77.9 million for East End towns in the first half of 2024, Thiele said in a press release yesterday. Riverhead had the second-lowest volume of tax collections among the five towns during the period, with the Town of Shelter Island posting the least collections at $1 million. Southampton generated the most at $41.3 million, followed by East Hampton at $25.2 million and Southold at $5.75 million.
Riverhead has a 2% transfer tax to fund the program, called the Community Preservation Fund, while every other town has a 2.5% tax and a larger tax exemption amount. The additional .5% tax funds affordable housing and housing assistance programs established by each town, pursuant to a 2022 state law written by Thiele. Riverhead’s Town Board has so far declined to authorize a referendum that would have increased the transfer tax .5% and create a Community Housing Fund.
Thiele said that an accurate comparison with prior years’ CPF revenues is difficult due to the changes to the tax in four of the five towns, but it can be estimated that the revenues are similar to those in the first half of 2023. Revenues are below those generated during the pandemic, which boomed the region’s housing market, but higher than pre-pandemic levels, Thiele said.
The revenue generated for Riverhead can go towards land preservation and water quality projects. Riverhead Town has already exceeded the $3.2 million officials budgeted the town to receive in 2024. That money will be used to pay off debt the town has from borrowing $70 million to fund land preservation purchases between 2000 and the 2008 real estate market crash.
The town’s CPF revenues after the financial crash were not enough to cover its debt service until 2016, when the fund’s revenue climbed to a point where the town was able to pay its debt service without depleting its reserves. The CPF debt burden was a major factor in Moody’s downgrading Riverhead’s bond rating in 2015.
The town has a significant amount of CPF revenues saved up — $14.6 million, according to the town’s 2024 adopted budget.
The transfer tax has generated $2.2 billion for the region since it was created in 1999 and has helped protect nearly 13,000 acres of land, according to Thiele.
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