A quick note before we start: this guide is general information, not legal or tax advice. Confirm current rates and exemptions with your real estate attorney or title company before closing.
If you're buying or selling a home in the Hamptons, one of the biggest closing costs that catches people off guard is transfer tax. Between New York State transfer tax, mansion tax, and the Peconic Bay Community Preservation Fund (CPF) tax, the numbers can add up quickly — especially in luxury markets like Southampton, East Hampton, and Bridgehampton.
Whether you're a first-time buyer, investor, or seasoned Hamptons homeowner, understanding these taxes before you go into contract can help you budget properly and negotiate smarter.
Here's your complete 2026 guide to Hamptons real estate transfer taxes.
What Is Transfer Tax?
Transfer tax is a tax charged when ownership of real estate changes hands. In New York and the Hamptons specifically, there are actually multiple taxes that may apply during a transaction:
- New York State Transfer Tax
- Peconic Bay Community Preservation Fund (CPF) Tax
- Mansion Tax
- Mortgage Recording Tax (if financing)
Some are traditionally paid by the seller, while others are typically paid by the buyer.
1. New York State Transfer Tax
New York State imposes a transfer tax on most real estate transactions statewide.
Current NYS Transfer Tax Rate: 0.4% of the purchase price — equal to $2 for every $500 of value.
Who Typically Pays? Traditionally, the seller pays the New York State transfer tax, though this can always be negotiated in the contract.
Example: On a $2,000,000 home purchase, NYS Transfer Tax = $8,000.
2. The Peconic Bay CPF Tax (The "Hamptons Transfer Tax")
This is the tax unique to the East End that surprises many buyers. The Peconic Bay Community Preservation Fund tax was created to help preserve farmland, open space, wetlands, and now community housing throughout the East End.
The tax applies in the following towns: Southampton, East Hampton, Shelter Island, Southold, Riverhead.
As of April 1, 2023, the CPF tax increased from 2% to 2.5% in Southampton, East Hampton, Shelter Island, and Southold to fund additional community housing initiatives. Riverhead remained at 2%.
| Town | CPF Rate |
|---|---|
| Southampton | 2.5% |
| East Hampton | 2.5% |
| Shelter Island | 2.5% |
| Southold | 2.5% |
| Riverhead | 2.0% |
CPF Exemptions
There are partial exemptions depending on the property type and purchase price.
- Southampton, East Hampton & Shelter Island — for improved residential properties: first $400,000 is exempt; no exemption if purchase price is $2 million or more.
- Vacant Land: first $100,000 exempt in certain towns.
- Riverhead: improved property exemption $150,000; vacant land exemption $75,000.
Example CPF Tax Calculation
Example 1: $1,500,000 home in Southampton — Purchase Price $1,500,000, Exempt Amount $400,000, Taxable Amount $1,100,000, CPF Tax at 2.5% = $27,500.
Example 2: $3,000,000 home in Southampton — because the property exceeds $2 million, no exemption applies; CPF Tax = 2.5% of $3,000,000 = $75,000.
3. Mansion Tax
Despite the name, "mansion tax" applies to many Hamptons homes — not just mansions. In New York State, mansion tax begins at purchases of $1,000,000 or more and is typically paid by the buyer.
| Purchase Price | Mansion Tax Rate |
|---|---|
| $1M – $1.99M | 1.00% |
| $2M – $2.99M | 1.25% |
| $3M – $4.99M | 1.50% |
| $5M – $9.99M | 2.25% |
| $10M – $14.99M | 3.25% |
| $15M – $19.99M | 3.50% |
| $20M – $24.99M | 3.75% |
| $25M and above | 3.90% |
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Mansion Tax Example: On a $5,000,000 home, Mansion Tax Rate 2.25%, Total Mansion Tax = $112,500. This is in addition to CPF tax and other closing costs.
4. Mortgage Recording Tax
If the buyer is financing the property, mortgage recording tax also applies. In Suffolk County, mortgage recording tax is approximately 1.8% to 1.925% depending on loan size and property type. This tax only applies to financed amounts — not cash purchases.
Who Pays What in the Hamptons
| Tax | Typically Paid By |
|---|---|
| NYS Transfer Tax | Seller |
| CPF Tax | Buyer (usually) |
| Mansion Tax | Buyer |
| Mortgage Recording Tax | Buyer |
While these are customary allocations, everything is negotiable in a purchase contract. In competitive luxury deals, buyers and sellers sometimes negotiate credits or split certain taxes differently.
First-Time Homebuyer CPF Exemption
Some first-time homebuyers may qualify for exemptions from the CPF tax in certain East End towns. Requirements generally include:
- Income limits
- Purchase price limits
- Primary residence occupancy requirements
Applications usually must be submitted before closing.
Why These Taxes Matter in the Hamptons
In many parts of the country, transfer taxes are relatively minor. In the Hamptons, however, they can dramatically impact a buyer's cash-to-close number. For example, on a $4 million purchase in Southampton:
- CPF Tax $100,000
- Mansion Tax $60,000
- Mortgage Recording Tax (if financing) potentially $50,000+
- Plus additional attorney, title, insurance, and recording costs
That's why buyers should always request a full closing cost estimate early in the process.
Final Thoughts
Hamptons real estate transfer taxes can feel overwhelming at first, but understanding them upfront helps avoid surprises later. Whether you're purchasing your first Hamptons home, investing in a summer rental property, or selling a luxury estate, knowing how CPF tax, mansion tax, and state transfer taxes work is essential to planning your transaction properly.
Every deal is different, and tax rules can change, so buyers and sellers should always confirm current rates and exemptions with their real estate attorney or title company before closing.
Frequently Asked Questions
Who pays the CPF tax in the Hamptons?
The CPF tax is typically paid by the buyer, though everything is negotiable in a purchase contract.
What is the CPF tax exemption?
There are partial exemptions depending on the property type and purchase price. In Southampton, East Hampton, and Shelter Island, the first $400,000 is exempt on improved residential properties, with no exemption if the purchase price is $2 million or more. Vacant land has a $100,000 exemption in certain towns. In Riverhead, the improved property exemption is $150,000 and the vacant land exemption is $75,000.
Does the mansion tax apply to homes that aren't mansions?
Yes. Despite the name, mansion tax applies to many Hamptons homes — not just mansions. In New York State, mansion tax begins at purchases of $1,000,000 or more and is typically paid by the buyer.
Who pays the NYS transfer tax?
Traditionally, the seller pays the New York State transfer tax, though this can always be negotiated in the contract.
Written by
Nathalia Valencia
Licensed Real Estate Broker
Nathalia is a licensed real estate broker and the founder of Nostra Haus, a boutique brokerage in Southampton. She has spent the last six years helping clients buy and sell across the Hamptons market.
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