Hamptons Markey Closing Costs Guide 6-23-23

PeconicBayPreservationFund:

The Peconic Bay Region Community Preservation Fund Tax is a one time 2.5% transfer tax on all real property sales in the 4 Townships of the East End including the Town of East Hampton, the Town of Shelter Island, The Town of Southampton, and the Town of Southold. The Town of Riverhead will remain at a 2% transfer tax.

Effective April 1, 2023, the exemption amounts have increased and in certain circumstances have been eliminated. Below are the new allowances for transactions in the townships.

East Hampton: Exemption $400,000 - Improved, $100,000 Vacant (Unimproved). No exemption on conveyances $2,000,000 or greater. Tax rate 2.5%

Shelter Island: Exemption $400,000 - Improved, $100,000 Vacant (Unimproved). No exemption on conveyances $2,000,000 or greater. Tax rate 2.5%

Southampton Town: Exemption $400,000 - Improved, $100,000

Vacant (Unimproved). No exemption on conveyances $2,000,000 or greater. Tax rate 2.5%

Riverhead Town: Exemption $150,000 - Improved, $75,000 Vacant (Unimproved) The rate will remain at 2% in Riverhead Township.

Southold: $200,000 - Exemption Improved, $75,000 Vacant (Unimproved) Tax rate 2.5%

First time home buyers may be eligeble for a first time homebuyer exemption. Please visit the town websites for more information.

To learn more about the first time homebuyer exemption, visit the following websites:

Town of East Hampton

Town of Riverhead - No First Time Exemption

Town of Shelter Island-Yes Call Town

Town of Southampton

Town of Southold

MortgageRecordingTax:

In the Hamptons, when a purchaser purchases a home there is a mortgage recording tax.

This tax is equal to .80% of the purchase price in Suffolk County and is paid by the buyer in the transaction.

LenderFees:

When choosing a lender to work with, the lender will give a buyer a good faith estimate of closing costs.

The fee's a buyer must pay to the lender are an appraisal fee, credit report fee and loan origination fees.

MansionTax:

The Mansion Tax is an additional tax of 1% of the sale price for residential purchaser where the sales price is $1,000,000 or more.

This tax is paid by the purchaser of the property.

TitleFees:

Title is the right to own and use the property a buyer is purchasing. Title fees are a group of fees associated with closing costs. These fees are paid to a title company to search, review, adjust, insure and record the title of the property being purchased.

The title company will perform a title search to find any potential issues with the title, such as encumbrances or liens. The company can then make any changes and ensure that their findings are correct. A buyer has the right to use whatever title company they would like and can shop around for this closing cost.

Title fee's are paid by the purchaser. It is customary that a title closer will also be given a tip paid for by the buyer at closing for their services.

TransferTax:

A transfer tax is charged by a state or local government to complete a sale of property from one owner to another. In a residential sale this tax is equal to $4 per $1,000.00 of the purchase price of the property. This tax is paid for by the seller of the property. However, if you are purchasing a new construction home, the transfer tax may be payable by the purchaser.

HomeInspection&PropertySurvey:

A home inspection and property survey are part of the closing costs when purchasing a house in the Hamptons. Prices will vary according to the square footage of both the house for the home inspection and for the land for the surveyor.

BrokerFees:

Depending on your agency relationship with your real estate agent, the commission due will either be paid by the seller from the proceeds of the sale or by to the buyers agent by the purchaser at closing. For further information, please discuss with your agent.

PropertyConditionDisclosureCredit:

This official NY State form is called a Property Condition Disclosure Statement. This form consists of 48 questions for the seller to answer about the condition of the property being sold.

When a seller is listing a property for sale, the seller has the option to fill out this form or give the purchaser a $500.00 credit at closing. If the seller fills out this form, it will be given to the purchaser prior to contract signing.

AttorneyFees:

In the Hamptons, a buyer and seller both have attorneys to facilitate the sale of the property. Attorney fee's are paid by the seller to the sellers attorney and by the buyer to the buyers attorney.

These fee's vary by attorney, so please contact your attorney directly.

Adjustments:

At the closing table there are a few other fee's that may be paid by the seller or the buyer.

These fees will include, oil that is still in the oil tank, gas that still in the propane tank, pre-paid real estate taxes and any other credits that were negotiated between the buyer and seller prior to closing.