Nantucket Land Bank Fee: Who Pays It and Can It Be Negotiated?

What Is the Nantucket Land Bank Fee?

The Nantucket Land Bank fee is a 2% real estate transfer tax assessed on the purchase price of nearly every real estate transaction on the island. It is paid by the buyer. It was established under Massachusetts General Law Chapter 669 of the Acts of 1983, which created the Nantucket Islands Land Bank — a conservation authority specifically empowered to acquire and permanently protect open land on Nantucket, MA.

The fee applies to:

• Single-family residential purchases
• Vacant land
• Commercial property
• Condominium units

There are limited exemptions — certain transfers between family members, some affordable housing transactions, and a small number of other categories — but for the overwhelming majority of arm's-length purchases on Nantucket, MA, you are paying 2% of the purchase price to the Land Bank at closing.

How Much Will You Actually Owe?

The math is straightforward. Take the purchase price, multiply by 0.02.

Purchase Price	Land Bank Fee (2%)
$2,000,000	$40,000
$3,500,000	$70,000
$5,000,000	$100,000
$8,000,000	$160,000
$15,000,000	$300,000

This fee is in addition to standard Massachusetts buyer closing costs, which include attorney fees, title insurance, recording fees, and any applicable mortgage costs. When budgeting for a Nantucket purchase, model the Land Bank fee as a separate line item from day one — not something you discover three days before closing.

Can the Nantucket Land Bank Fee Be Negotiated?

No. The Land Bank fee is a statutory obligation under Massachusetts law. It is not a negotiating chip between buyer and seller, not a lender fee with wiggle room, and not something a skilled agent can structure around. It is owed to the Nantucket Islands Land Bank, not to any party in the transaction.

What you may occasionally see in negotiations is a seller agreeing to credit the buyer a portion of their closing costs — and some buyers and sellers characterize this loosely as "the seller covering the Land Bank fee." That is not what's happening. The buyer still owes the 2% to the Land Bank at closing. The seller is separately agreeing to adjust the economics of the deal.

Why Does the Land Bank Fee Exist — and What Does It Fund?

The Nantucket Islands Land Bank has used these transfer fees to acquire and permanently protect a significant portion of the island's open land since 1984. That includes conservation trails, agricultural land, coastal access points, and sensitive habitat areas that would otherwise be developable.

This matters for buyers beyond the abstract. The conservation land that the Land Bank has accumulated over four decades is a direct contributor to the supply constraint that makes Nantucket, MA real estate valuable. Every acre that cannot be developed is an acre that cannot produce new competing inventory. The buyers who understand this tend to have a cleaner relationship with paying the fee — they are not just paying a tax, they are funding the mechanism that protects the market character their purchase depends on.

The Land Bank is also a public trail system. Miles of walking and biking access across the island are Land Bank holdings. If you've walked the Ram Pasture or biked out to Smooth Hummocks, you've used what the fee built.

How Does the Nantucket Land Bank Fee Compare to Martha's Vineyard?

Martha's Vineyard, MA has its own Land Bank — the Martha's Vineyard Land Bank — operating under the same 1983 enabling legislation, with the same 2% transfer fee structure and the same buyer-pays mechanic. If you're evaluating both islands, the Land Bank fee is not a differentiator between them. Both cost you 2% of the purchase price at closing.

Where the markets differ on total transaction cost: Nantucket's Historic District Commission (HDC) creates significant downstream costs for buyers who intend to renovate or improve their property. HDC review, the approval process, and the restrictions on what changes are permissible can add material time and cost to a project in ways that don't exist for most Vineyard properties outside of Edgartown's historic district.

What Other Closing Costs Should Nantucket Buyers Expect?

Beyond the 2% Land Bank fee, a Nantucket, MA buyer should budget for:

• Attorney fees: Massachusetts is an attorney-closing state. A real estate attorney is required, not optional. Budget $1,500–$3,500+ depending on transaction complexity.
• Title insurance: Lender's policy required if financing; owner's policy strongly recommended. Cost scales with purchase price.
• Recording fees: Nantucket Registry of Deeds fees for the deed and any mortgage documents.
• Lender fees: If financing, origination, appraisal, and underwriting costs vary by lender and loan structure.
• Property inspection: Essential due diligence on any Nantucket property — particularly older in-town properties with historic construction that can carry deferred maintenance not visible on a showing.

Total buyer closing costs on a Nantucket purchase, including the Land Bank fee, typically run 3.5%–5% of the purchase price depending on financing structure and attorney scope.

When Is the Land Bank Fee Due?

The Land Bank fee is due at closing — simultaneously with all other closing costs and the balance of the purchase price. It is collected by the closing attorney, who remits it directly to the Nantucket Islands Land Bank. There is no installment option, no deferral mechanism, and no way to roll it into a mortgage.

Buyers financing their Nantucket purchase need to ensure their liquidity covers the Land Bank fee as cash at closing. Lenders do not finance closing costs in most conventional loan structures, and the Land Bank fee is no exception.