Buying or selling on Nantucket and hearing about a 2 percent Land Bank fee? You are not alone. This fee is part of almost every property transfer on the island, so understanding it early can save you surprises at closing. In this guide, you will learn who pays, how the fee is calculated, what exemptions exist, and how to keep your closing on track. Let’s dive in.
Land Bank fee basics
The Nantucket Islands Land Bank is a public commission that preserves open space, waterfront access, recreation, and agricultural land on the island. Its primary funding comes from a 2 percent transfer fee on most real estate transfers in Nantucket County. The fee is calculated on the “purchase price” as defined by statute and is deposited into the Land Bank Fund. You can read about the commission’s mission and origin on the Land Bank’s establishment page and in the compiled statute that governs the fee and exemptions in Chapter 669.
Who pays and when
Under the statute, the purchaser is legally liable for the 2 percent fee. Parties can negotiate credits between buyer and seller, but private agreements do not change the purchaser’s statutory responsibility. The fee is due at the time of transfer, and the Land Bank issues a certificate after payment or after approving an exemption. The Registry will not record a deed without that certificate attached, as set out in the compiled statute.
What counts as purchase price
The law defines “purchase price” broadly. It includes cash paid at closing, assumed mortgages, promissory notes, deferred payments, and other consideration paid on your behalf. Certain current municipal liens and non‑overdue real estate taxes are excluded from the calculation. For the exact definitions and treatment, see the compiled statute.
Quick examples
- Simple sale: $1,000,000 purchase price → Land Bank fee = $20,000.
- With first‑time buyer exemption: $2,000,000 purchase price with the 2025 cap of $1,200,000 exempted → taxable portion $800,000 → fee = $16,000. If you later fail the exemption requirements, the previously exempted amount becomes due with interest and penalties.
Exemptions overview
The statute lists several exemptions that can apply to specific transfer types. Examples include transfers to government entities, gifts, confirmatory deeds, transfers by operation of law, certain charitable transfers, entity formation or reorganization transfers, partition, and foreclosure‑related transfers. The full and controlling list appears in Section 12 of the compiled statute.
First‑time homebuyer “M” exemption
The “M” exemption can reduce the fee for qualified first‑time buyers. As of January 1, 2025, the Commission increased the exempt dollar cap to $1,200,000, as noted in the Land Bank’s public notice. To qualify, you or your spouse must have never owned a real property interest anywhere, and you must make the property your domicile within the required time and remain an owner‑occupant for the specified years. The Land Bank records a lien to secure compliance, and if you do not meet the requirements, the exempted fee becomes due with statutory interest. Review the purchaser obligations in the Form M instructions.
Important filing notes for M:
- Purchasers must sign Form M personally; attorneys cannot sign for the purchasers.
- Include all supporting documents required on the Forms page.
Affordable housing “O” exemption
Transfers that are subject to qualifying affordable housing restrictions may qualify under Section 12(o). The Land Bank records a lien and may require monitoring by the restriction holder. Review the requirements and documentation in Form O.
Anti‑evasion rule
If a transfer, or series of transfers, is structured primarily to avoid the fee, the Land Bank can disallow the exemption and assess the fee plus interest and penalties. The purchaser bears the burden of showing a bona fide business purpose. See the enforcement provisions in the compiled statute.
How to file and keep closing on track
Every transfer requires a Land Bank submission. Most transactions include Form 1, the deed, and a payment check for the 2 percent fee unless you are claiming an exemption. If any party is an entity, include Form 2 for each entity. Exemptions require the relevant A–O form and complete supporting documents. See current instructions and forms on the Land Bank’s Forms page and the Transfer FAQ.
The Land Bank reviews the package and issues a payment or exemption certificate. That certificate must be affixed to the deed for the Registry to accept it for recording. Submitting a complete package and coordinating with your attorney or title company helps avoid delays. Processing times vary, so build in a little cushion.
Quick pre‑closing checklist
- Completed Form 1 for all transfers, plus Form 2 if a buyer or seller is an entity. Find both on the Land Bank Forms page.
- Payment check for 2 percent of the purchase price, unless you claim an exemption. See the Transfer FAQ for current submission details.
- If claiming an exemption: the correct A–O form fully completed with required attachments. Purchasers must personally sign Forms M and O.
- Deed copy, recording checks for the Nantucket Registry of Deeds, and a cover letter with recording instructions if needed.
Practical tips for buyers and sellers
- Contract credits do not change who is liable. Even if the seller credits the buyer for the fee, the purchaser remains the legal payer under the statute.
- Refinancing after taking M. The Land Bank states that liens placed for M or O exemptions are generally subordinate to mortgage refinancing, which typically means no payoff is required at refinance, but confirm terms with your lender and the Land Bank. See the Transfer FAQ.
- Tax questions. The Land Bank notes the fee is not tax‑deductible as an income tax item and recommends consulting a tax professional about your specific situation. See the Transfer FAQ for the Land Bank’s guidance.
When you are ready to buy or sell, it helps to plan for the Land Bank fee alongside your other closing costs. A little preparation keeps the process smooth and prevents last‑minute delays.
Looking for a local, relationship‑driven team to guide your next Nantucket purchase or sale, including the Land Bank steps and timing? Connect with Sanford & Sanford Real Estate for thoughtful advice and a seamless closing experience.
FAQs
What is the Nantucket Land Bank transfer fee?
- It is a 2 percent fee on most real estate transfers in Nantucket County that funds island land conservation and access, as established by the Land Bank’s governing statute.
Who is legally responsible for paying the fee?
- The purchaser is liable for the fee, and private agreements about credits do not change that statutory responsibility, per the compiled statute.
How does the 2025 first‑time buyer “M” exemption work?
- Qualified first‑time purchasers may exempt up to $1,200,000 of the purchase price as of January 1, 2025, subject to owner‑occupancy and timing rules, a recorded lien, and strict filing requirements outlined in the Land Bank’s notice and Form M instructions.
What documents do I need to submit for recording?
- A complete package typically includes Form 1, payment for the 2 percent fee or an exemption form with supporting documents, the deed, and any entity forms, so the Land Bank can issue the certificate required by the Registry; see the Forms page and Transfer FAQ.
If I refinance after using the M exemption, do I have to pay off the Land Bank lien?
- The Land Bank indicates M and O liens are generally subordinate to mortgage refinancing, so payoff is typically not required, but confirm details with your lender and the Land Bank’s Transfer FAQ.
Where can I find official forms and guidance?
- The Land Bank’s authoritative resources include the Forms page, the Transfer FAQ, and the governing statute.
