Real Property Law Section Blog

Transfer Tax/Peconic Bay Region (Suffolk County) - Article 31-D of New York State's Tax Law ("Tax on Real Estate Transfers in the Peconic Bay Region"), has been amended by Chapter 349 of the Laws of 2008, signed into law and effective on July 21, 2008. An amended Peconic Bay Region Community Preservation Fund transfer tax return ("Return"), which must be printed and filed on 8 ½ by 14 paper, can be obtained at http://www.co.suffolk.ny.us/upload/countyclerk/pdfs/revisedcpf072908.pdf

New subdivisions 4 and 5 have been added to Tax Law Section 1449-ee ("Exemptions"), providing an exemption on the purchase of "primary residential property" in the Towns of Southampton, East Hampton and Shelter Island by one of more persons "each of whom is a "first-time homebuyer". For the exemption to apply, the purchase price of the property must be within 120% of certain "purchase price limits" and the buyer's "household income" must not exceed certain "income limits", as set forth in amended Section 1449-ee. This exemption is not available in the Towns of Riverhead and Southold. The exemption must be approved by the applicable Town on forms being issued. Line "m" Conveyance of real property as a primary residence where the grantee is a first-time homebuyer" on Part II ("Explanation of Exemption") of the Return must be checked when the exemption is claimed, and a copy of the Town approved application must be affixed to the Return.

Another exemption, applicable in all Towns subject to the Peconic Bay transfer tax, is in new paragraph "M" of subdivision 2 Tax Law of Section 1449-ee.

"M. Conveyances of real property to any tax exempt corporation, incorporated pursuant to the Not-For-Profit Corporation Law or the Private Housing Finance Law, where such conveyance is for the purposes of providing affordable housing opportunities.

For the purposes of this paragraph, 'affordable housing' shall mean housing opportunities exclusively for Town residents of the Towns whose income is at or below the median income for the Town". Line "n" of Part II of the amended tax return, "Conveyance of real property to a tax exempt, not-for-profit corporation for the purpose of providing affordable housing", will need to be checked to claim this exemption.

Under Real Property Law ("RPL") Section 294-b ("Recording brokers affidavit of entitlement to commission for completed brokerage services"), a duly licensed real estate broker asserting entitlement to a commission for producing a person or entity who purchases or leases real property may file an affidavit of entitlement to a commission with the recording officer of the county in which any of the real property in question is located. The filing of the affidavit does not invalidate the transfer or lease of real property, does not create a lien, and shall be discharged after one year. Section 294-b has been amended by Chapter 436 of the Laws of 2008, effective January 1, 2009. First, the scope of a notice of entitlement has been expanded to include a claim for a commission in connection with the conveyance of an interest in a cooperative unit. Second, the affidavit of entitlement, while still not a lien, will be recorded in the "lien docket". Third, when the subject property is a one-to-four family dwelling, an individual condominium unit or an individual cooperative apartment, used or intended to be used, wholly or partially, as a residence, and the broker's commission is not paid at closing, "the lesser of the net proceeds of the sale or the amount of the unpaid portion of the compensation agreed to in such written contract [the brokerage agreement] shall be deposited by the seller… with the recording officer in whose office the affidavit was recorded…until the rights of the seller and broker to such monies has been determined by order of a court of competent jurisdiction…", provided that (i) the brokerage contract includes a notice, as required by Chapter 436, (ii) the affidavit has been recorded, and (iii) the broker serves a copy of the affidavit on the seller prior to closing, as required by the statute. The failure to deposit monies with the recording officer does not "create a lien or encumbrance against any real property" and does not invalidate "any transfer of real property".

The mortgage tax in Warren County will increased from $1.00 to $1.25 for each $100 secured by a mortgage efffective as to mortgages recorded on and after October 1, 2008.

See http://www.tax.state.ny.us/pdf/memos/mortgage/m08_1r.pdf