"The Land Bank is proof that a local transfer fee on Nantucket works."
Rachael Freeman, executive director of the Nantucket Islands Land Bank, said that in testimony to state lawmakers last fall, defending a fee that does not exist. The transfer fee her own agency has collected for decades was not the one under discussion at the State House that day. She was defending a different proposal entirely, the one Massachusetts legislators left out of a major housing bill again this July. Meanwhile, the fee that actually shows up on nearly every Nantucket closing statement barely came up in the conversation at all.
If you are buying or selling on the island this year, you have probably run into some version of this mix-up. Someone mentions "the transfer fee" and you are not sure whether they mean the 2 percent you will actually owe at closing or the fee that keeps failing on Beacon Hill. In a market where well-priced homes are going under agreement in days, that confusion costs real money at the worst possible moment: when you are still writing your offer.
The Fee That's Already on Your Closing Statement
Every Nantucket buyer pays this one, unless they qualify for an exemption. The rate is 2 percent of the purchase price, paid by the purchaser at the time of transfer, and it is not limited to conventional home sales. Any transfer of interest, including a lease running 30 years or longer once extensions are counted, has to clear the Land Bank before it can be recorded at the Nantucket County Registry of Deeds. If you are structuring a long-term ground lease instead of a fee-simple purchase, the fee still finds you.
The one real relief valve is the first-time buyer exemption, and the Land Bank Commission resets its size every January based on where prices stand. As of January 2026, a qualifying first-time buyer can exempt up to $1.4 million of the purchase price, provided they have never owned real property anywhere and make the home their actual domicile within a year of closing. The catch is what happens if plans change. The Land Bank records a lien against the property, and if you sell before the five-year mark, the exempted fee comes due immediately, plus interest at 14 percent a year, set by statute. Sell in year three because a job pulls you off-island, and you owe the fee you thought you had avoided, with real interest stacked on top.
Here is how that fee compares with the one Freeman was actually defending:
| Land Bank Fee | Proposed Housing Bank Fee | |
|---|---|---|
| Status | Law for decades | Not law, stalled again in 2026 |
| Who pays | Buyer | Seller, if it ever passes |
| Rate | 2% of purchase price | 0.5% on the portion above $2 million |
| What it funds | Conservation land acquisition | Affordable and workforce housing |
| In effect today | Yes, on nearly every transfer | No |
Why the Other Fee Keeps Losing
For more than a decade, Nantucket has asked the Massachusetts Legislature for permission to charge a second, much smaller fee: 0.5 percent on the portion of a sale above $2 million, paid by the seller this time, dedicated to affordable and workforce housing rather than conservation. State Senator Julian Cyr and Representative Thomas Moakley have carried versions of the bill in recent sessions. Every year, it has failed to reach a vote.
The most recent attempt died again this July, when the measure was left out of the Mass Wins Act, a broad housing bill that did pass. "We still face opposition from the statewide real estate lobby on any discussion of a transfer fee," Cyr said afterward. The opposition is coming from off-island. Nantucket's own trade group, the Nantucket Association of Real Estate Brokers, backs the fee. Former NAREB president Penny Dey has said the group "has voted numerous times to support the Nantucket fee legislation over the last decade," and pushed back directly on the state association's position: "They don't speak for us."
Nantucket Housing Director Kristie Ferrantella has called the proposal "a sustainable, dedicated revenue source for housing that doesn't increase property taxes," and estimated the fee could generate as much as $4 million in a single year. A separate analysis from the UMass Donahue Institute, made public this spring, put the average annual figure closer to $3.3 million to $3.9 million and found no evidence that a fee at this scale would meaningfully reduce sales volume or suppress prices in a market like Nantucket's. The same analysis noted that purchasing the 2024 median single-family home on the island required an annual household income above $800,000, which is the underlying gap driving the entire push.
None of this changes what you owe today. The 0.5 percent fee is not law. Cyr has already said the next attempt waits for the Legislature to reconvene in January 2027. If you are selling above $2 million this year, budget as if the fee does not exist, because it doesn't. If your closing could stretch into next year, it is worth having your attorney keep an eye on the session as the date gets closer.
What This Means If You're Writing an Offer This Year
The reason the timing of the real fee matters is the market you are competing in. Through June 30, 2026, 89 homes had sold on Nantucket, down 19 percent from 110 over the same stretch in 2025, based on year-to-date data from LINK, the island's Multiple Listing Service. The median sale price rose 11 percent over that period, to $3,675,000, while the average sale price climbed 18 percent, to $4,506,000. When the average outruns the median by that much, it is a sign the mix of what sold skewed toward the high end, not that every home on the island gained 11 percent in value.
Inventory tells the tighter story. Nantucket ended June with 167 properties on the market, down 32 percent from 245 a year earlier, and new listings that month were down 24 percent as well. That works out to roughly 10 months of residential inventory at the current pace of sales.
The days-on-market figure hides a split market. In the middle of the price range, homes are moving fast and at full price. 15 Kendrick Street sold at asking after 4 days on market. 20 Rudder Lane sold at asking after 6 days. 5 Rudder Lane closed at 102 percent of ask after just 3 days. At the top of the market, the pattern reverses. 8 Priscilla Lane spent 84 days before going under agreement and 143 days from listing to closing, eventually selling at 91 percent of ask.
That split is exactly why the Land Bank fee needs to be part of your first offer, not a line item you try to negotiate later. If you are competing for a home under $3.5 million, you are very likely in a multiple-offer situation with days, not weeks, to respond. There is no room after the fact to ask a seller to cover part of the 2 percent once you are one of several offers on the table. Buyers who build the fee into their number from the start, rather than treating it as a surprise at the closing table, are the ones who can move at the pace this market currently demands.
If you are pricing above $5 million, the calculus is different again. Longer marketing time and larger price adjustments both mean it is worth confirming exactly where the fee stands each time you revisit your number, since the outcome of the Legislature's next session could still change what a high-value sale costs to close in 2027.
Whichever side of the closing table you are on this year, the fee to plan around is the one that already exists. Northeast Realty + Co. tracks both the Land Bank's exemption thresholds and the Legislature's next attempt at a housing fee, because on an island this tight, the difference between the two can change your offer strategy before you ever submit it. If you want off-market intel before a listing like 15 Kendrick Street ever reaches the public market, Join the Insiders Club.