Tuckahoe Taxes Have Some Seeking Relief From Southampton Town

Builders and real estate agents are asking the Southampton Town Board to provide tax relief in the Tuckahoe School District, saying that high taxes on new construction are stopping buyers from purchasing new homes there.

The current tax rate for homes in the school district is 7.14 per $1,000 of assessed valuation, compared to 2.16 per $1,000 of assessed valuation for homes in the neighboring Southampton School District.

According to Frank DeVito, the owner of Southampton-based DeVito and Company—which designs and builds custom homes on the East End—some homes he builds in the area on half-acre lots come with a tax bill of between $30,000 and $40,000 per year.

One home, he told Town Board members during a meeting on January 8, was originally estimated to have a tax bill of $66,000, but after adjustments and discussions with town officials, the taxes were dropped to $38,000.

“We’re losing buyer after buyer on this house,” he told Town Board members. “I have a house on the other side of the village that I’m paying $8,000 a year in taxes. The same size lot.”

The town does not set the tax rate in a school district; it is based in part on the total assessed property valuation in the district.

Of the 951 acres of land in the Tuckahoe School District, 12.7 percent comprises four private golf courses: Southampton Golf Club, Shinnecock Hills Golf Club, Sebonack Golf Club and National Golf Links of America.

For purposes of taxation, golf courses are not assessed based on property value, like homes, but instead are assessed on their annual income. The income at golf courses is based on commercial activities along with restaurant and pro-shop sales—membership dues are not included. As a result, the golf courses pay less than 5 percent of the district’s total tax levy, despite covering about one-eighth of the total land in the school district.

The majority of the burden for the resulting “astronomical taxes,” as Mr. DeVito described them, is on the homeowners and the developers.

“It just can’t be the school, because there’s 400 kids,” he said. “I can put them in private school for what I’m paying for two houses.”

As an incentive for buyers, Mr. DeVito said he is offering to pay half of the taxes for the first three years, allowing time for the new homeowner to grieve the taxes and negotiate the bills down.

Linda Nigro, a resident of Tuckahoe and a real estate agent, said she is running into the same problem as Mr. DeVito when it comes to selling homes in the district. Areas that had been taxed low as vacant farmland are now being populated by developments.

For example, the land where The Fields—a new residential development on Rosko Lane, between Tuckahoe Lane and Magee Street—has 28 homes planned, only a few have been sold, according to Ms. Nigro. Prior to the development being planned, the land had a relatively small tax bill.

She said when she shows the homes, people are turned away when they realize the taxes are nearly $30,000 per year.

“I propose that for new construction in Tuckahoe, or even Hampton Bays … that maybe we do some sort of amortization of taxes for new construction,” Ms. Nigro said; the tax rate in Hampton Bays is even higher, at 13.01 per $1,000 of assessed value. “Most of these people who are buying these homes are second-home users who will not have children in Tuckahoe School.”

She suggested having the homeowners start with a rate of 2.16, equal to what is paid in Southampton School District, and over the next 10 years bring them up to Tuckahoe’s normal rate. Ms. Nigro said the idea is that more people will purchase homes, and in 10 years, the rate can come down because more homes will be on the tax rolls.

“Something like that, that kind of phasing-in taxes, would have to be authorized by New York State,” Town Supervisor Jay Schneiderman said.

Homes in Southampton School District, Mr. Schneiderman said, pay less in taxes because there are many more homes that are worth a lot more money and help keep the tax rate down. Tuckahoe, he added, does not have that same situation.

Town Board member Tommy John Schiavoni noted that Tuckahoe School District’s total tax base is $2.63 billion, compared to Southampton School District, which has a tax base of more than $26 billion.

Town Board member Christine Scalera said she is working with State Assemblyman Fred W. Thiele Jr. to find a way to offer relief to those who live in areas where taxes continue to go higher than others.

She said residents who have seen an increase in assessments on their properties, who live on fixed incomes, have come to her to find a solution that could offer relief. One idea, she said, is to possibly freeze the assessments for them temporarily.

Another option, Ms. Scalera said, is to look at areas with multiple golf courses within a set number of square miles. Then, she said, the town could make those people who live near the golf courses eligible for a forbearance, or time period, that the town would not increase taxes.

“These are things to look at,” Ms. Scalera said, pointing out that everything is in the preliminary stages right now. “It’s a very real situation for a lot of people.”

Still, taxes continue to increase in areas like Tuckahoe, impacting those who live or build there.

Although Mr. DeVito did not return multiple calls seeking additional information and reasons why he continues to build in Tuckahoe, he offered a solution to Town Board members at the meeting: “If you lower the taxes a little and development comes in and work comes in and you create more secondary homes there, you will have sales. You will bring in more revenue.”