Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.
Q: I'm looking to buy a property in the Hamptons in New York. Can you explain how town/village property taxes work?
A: The Hamptons is made up of two towns: East Hampton and Southampton. Homeowners pay property taxes to the town in which they live.
But the Hamptons is also full of incorporated villages and hamlets. In those incorporated areas, there are additional taxes, according to East Hampton-based attorney Roy Greenberg.
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"If you live in the village, you’re taxed by the village and the town," he said. "If you’re not in the village, you only pay taxes to the town."
So for a $2 million home in East Hampton, town taxes are about $5,000, while village taxes are about $2,100, Mr. Greenberg said.
The tax system developed over the course of more than three centuries, Mr. Greenberg said, which is why it may seem a bit "willy-nilly."
In the Town of East Hampton, the equalization rate is 0.57%, meaning residents pay taxes on 57% of the market value of their home, according to New York State's Department of Taxation and Finance’s website. Amagansett, Wainscott and Montauk, among others, are part of the Town of East Hampton.
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For those who live in the incorporated Village of East Hampton, there’s an additional tax of 2% to 4% of the market value of that property, according to the village’s website.
There are other villages within the Town of East Hampton that are incorporated, like Sag Harbor, where taxes are due to both the town and the village.
However, some areas in the Hamptons are unincorporated, said John A. Viteritti, a local real estate consultant. Montauk and Springs are two examples, and for homeowners in those areas, property taxes are only due to the town, he said.
The situation is similar in the Town of Southampton. Property taxes are due to the town, but also to incorporated municipalities, Mr. Greenberg said.
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