Community Preservation Fund

Real estate transfer taxes raised more than $152 million for land preservation in the East End towns last year — and $29 million for housing since 2023.

Riverhead’s proposed plan to use real property transfer tax revenues for water mains to areas where private wells are contaminated drew criticism at a public hearing Tuesday.

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. 

During 2021 and 2022, Riverhead failed to record the dates on which seven CPF collections totaling $5.3 million were received and failed to deposit $5.3 million in CPF collections — about ⅓ of its collections — within the 10-day period required by state law.

Riverhead was the only town on the East End to see its Community Preservation Fund revenues increase in 2022.

Riverhead Town generated $7.89 million in Community Preservation Fund revenue in the first 11 months of 2022, breaking the yearly record it set in 2021, according to a report by Assembly Member Fred Thiele.

There will be no ballot referendum this year in Riverhead to add a half-percent real estate transfer tax to  build revenue for town-sponsored affordable housing opportunities, as the Town Board has determined that the town has enough affordable housing and the state law allowing East End towns to create a “community housing fund” is not meant for Riverhead.

A booming real estate market continues to push preservation fund tax revenues upward. The tax revenues, drawn from a 2% transfer tax on real estate sales, can be used to purchase farmland and open space and fund water quality improvement projects.

The pandemic-fueled red-hot real estate market on the East End has boosted land preservation funds by record amounts. In Riverhead, 2021 CPF transfer tax revenues exceeded the town's budget projection by more than 70%.

The red-hot real estate market on the East End continues to push home prices higher and break revenue records for the Peconic Bay Community Preservation Fund, which is generated by a 2% tax on real estate transfers in the five East End towns. High demand in the luxury markets on both forks continues to drive the growth.