What is the best way to fund preservation?

To the editor: On May 12 a story ran in The Warwick Advertiser - “Is Warwick like the Hamptons?” - which referenced a meeting held for the local Realtors by Town Supervisor Michael Sweeton. The issue being discussed is the proposed legislation that would allow Warwick to impose a three-quarters of one percent transfer tax on most real estate transactions. Is Warwick like the Hamptons? In some respects the answer is yes. Both areas are beautiful and the communities impacted by the Peconic Land Trust recognized early that they needed to preserve the beauty of the area, the farms and the open spaces. Warwick has recognized the need for preservation and has taken successful steps to do so, but the two areas have entirely different tax bases. The tourism and the multi-million dollar recreational properties in the Hamptons contribute to the tax base but do not burden the school districts. For an example, the 2 percent transfer tax imposed on a home sold there was $12,000. That $800,000 home only paid a combined village, town, county and school tax of $3,500 annually. I asked the Suffolk County Realtors who attending the meeting, “If that home paid $22,000 annually in property taxes, would that additional $12,000 transfer tax be a problem?” One answered: “I’d be more concerned about the $22,000 annual tax.” Which, of course, is exactly the point and the difference. The overwhelming majority of realtors that spoke at that meeting were in favor of land preservation but were concerned about an additional closing cost burden on buyers. The issue is what is the best way to fund land preservation. The National Association of Realtors opposes this type of tax. Ann Garti, CEO of the Orange County Association of Realtors stated that while the association supports the land preservation objectives of the legislation, the association feels that reliance upon a real estate transfer tax is poor public policy. For example, the narrow base of transfer taxes places a financial burden an a small segment of the population for programs that benefit the entire community, transfer taxes are a disincentive for commercial interests to invest in the community and they reduce the ability of first-time buyers to purchase by pushing New York’s notoriously high closing costs even higher. My parents and I were born and raised in Southampton. My parents still live there. In June, it was reported in the Southampton Press that the transfer tax had an approved increase to 4 percent. So if Warwick is like the Hamptons and this tax is the best solution, then we should expect it to double? Or are we now going to say we are not like “them?” Warwick is a wonderful area and why so many choose to make it their home. We need to all work together to think of a creative solution to fund our land preservation and maintain quality of life. Katheryn DeClerck Broker Associate Century 21 Peck Realty Warwick