Buying on Nantucket often starts with sandy toes and blue‑water views. Then your attorney mentions the Nantucket Land Bank fee, and the math gets real. If you are planning a purchase on the island, understanding this local transfer fee upfront will help you budget with confidence and negotiate smartly. In this guide, you will learn what the Land Bank is, how the fee is calculated and collected, who typically pays it, where exemptions may apply, and how to plan for it at closing. Let’s dive in.
What the Land Bank is
The Nantucket Land Bank is a local program that acquires and preserves open space, beaches, and other conservation resources on the island. It is funded primarily through a real‑estate transfer fee collected when eligible properties change hands in Nantucket County. This charge supports land acquisition and ongoing stewardship.
The Land Bank fee is a local transaction‑based transfer tax that sits alongside other closing costs. It is distinct from Massachusetts documentary stamps, excise taxes, mortgage recording charges, and recording fees. You should expect the Land Bank fee to be an additional, separate line item at closing.
How the fee works at closing
The Land Bank fee is assessed on the value used for the conveyance and is due when the deed is recorded.
The basic formula
The math is straightforward:
- Fee = Purchase price × R, where R is the current Land Bank rate.
- Because rates can change, you should confirm the current rate with the Nantucket Land Bank Commission or your title company before you finalize your numbers.
Here is a hypothetical illustration for calculation only:
- If R were 1.5% and your purchase price were $1,500,000, the fee would be $22,500.
- Replace 1.5% with the current rate when you run your actual calculation.
Who typically pays
Many Nantucket closings show the Land Bank fee as a buyer expense. That said, payment can be negotiated in your purchase contract. Depending on market conditions, you may ask for a seller credit, price adjustment, or split allocation. Your agent can advise on local custom and what is realistic for your specific offer.
When and how it is collected
The fee is generally paid at closing when the deed is recorded. Title companies, closing attorneys, or escrow agents collect it and remit it to the Land Bank or facilitate payment through the Registry of Deeds. Evidence of payment, or an approved exemption certificate, is reflected in the recording. Most lenders require confirmation of payment before funding or recording.
Mortgages and lender policies
Whether you can finance the fee into your loan depends on lender policy. Conventional lenders often treat it as a closing cost that must be paid by the buyer or seller at closing rather than added to the loan principal. The fee does not affect appraised value directly, but it does impact your cash to close, which can change your down‑payment strategy. Always confirm with your lender early in the process.
Exemptions at a glance
Some categories of transfers are commonly exempt from local transfer fees when proper documentation is filed. Final eligibility depends on the Land Bank Commission’s rules and local recording practices. Typical categories can include:
- Transfers between spouses or those incident to divorce.
- Transfers upon death or to an estate’s executor or administrator.
- Transfers into or out of certain revocable living trusts where the grantor retains control.
- Transfers to or by governmental entities or public agencies.
- Transfers to qualified non‑profit conservation organizations, especially when conservation restrictions are recorded.
- Certain foreclosure‑related transfers or those made to cure title issues.
- Transfers that fall under a statutory monetary threshold, if applicable.
- Sales subject to recorded permanent conservation restrictions or sales approved for exemption by the Land Bank Commission.
Because rules can evolve, you should verify the current exemption list and requirements with your title company or attorney.
Exemption paperwork you may need
If you believe an exemption applies, plan ahead for documentation:
- An exemption affidavit or certificate filed with the Registry and provided to the Land Bank.
- Supporting records like divorce decrees, probate documents, trust instruments, government transfer letters, or proof of non‑profit status.
- Prior approval from the Land Bank Commission in some cases.
Misstating an exemption can trigger penalties, interest, and title complications. Title professionals typically verify eligibility before recording to avoid delays.
How to budget for the fee
On Nantucket, even a modest percentage can translate into a five‑ or six‑figure number. Treat the Land Bank fee as part of your cash to close unless your contract shifts the expense or your lender confirms a different approach.
Key tips:
- Build the fee into your budget from day one using the formula Fee = Purchase price × R.
- Confirm the current rate with your title company or the Land Bank Commission.
- Explore negotiations that offset the fee, such as a seller credit or price adjustment.
- Keep the fee separate from state documentary stamps and other recording costs when you plan your funds.
Simple step‑by‑step calculator
Use this quick process to estimate your cash to close:
- Identify the purchase price (P) in your offer.
- Confirm the current Land Bank rate (R) with your title company or the Land Bank Commission.
- Compute the fee: Fee = P × R.
- Add the fee to other closing costs like state excise, recording fees, title insurance, and attorney fees to get your total cash requirement.
Hypothetical example for illustration only:
- Purchase price: $1,500,000
- Hypothetical rate used for demonstration: R = 1.5%
- Fee = $1,500,000 × 0.015 = $22,500
- Replace 1.5% with the actual current rate when you run your final numbers.
How it appears on your closing statement
You will typically see a line item labeled “Nantucket Land Bank Fee,” allocated to the buyer or seller per the contract. If the seller agrees to reimburse all or part of it, that will appear as a credit on the statement. Keep the Land Bank fee distinct from other items like Massachusetts documentary stamps, recording charges, title insurance premiums, and legal fees.
Buyer and seller checklist
A clean process comes from planning. Use this checklist as your roadmap.
Before you write an offer
- Ask the listing agent whether the Land Bank fee applies and who customarily pays.
- Confirm the current Land Bank rate and whether any exemptions could apply to the property.
- Ask your lender how they treat the fee and whether it must be paid at closing.
When drafting your offer
- Specify who pays the Land Bank fee in the purchase agreement.
- If you want seller participation, define it as a credit or price reduction.
During due diligence
- Review the title commitment for any recorded conservation restrictions or transfer history that may affect the fee or an exemption.
- Confirm lender requirements for cash to close and any limits on credits.
- Coordinate with your attorney or title company on exemption paperwork, if relevant.
At closing
- Confirm that the closing agent has collected the fee or prepared the exemption filing.
- Verify that your closing statement correctly allocates the fee and any credits.
- Ensure the deed references payment or an exemption certificate when recorded.
After closing
- Keep copies of the recorded deed and the Land Bank receipt or exemption document for your records and future resale.
Why this matters for Nantucket buyers
Nantucket is a rare market where conservation and lifestyle go hand in hand. The Land Bank fee funds open space and access that make the island special. For you as a buyer, understanding the fee early helps you set a precise budget, structure your offer with confidence, and avoid last‑minute surprises with your lender. With the right plan, the fee becomes a known line item rather than a stress point.
If you would value private, concierge‑level guidance from offer through closing, connect with the team at Christie’s International Real Estate Atlantic Brokerage. We pair hyper‑local expertise across the Cape and Nantucket with global Christie’s reach to help you navigate details like the Land Bank fee while staying focused on the property that fits your life.
FAQs
Who usually pays the Nantucket Land Bank fee?
- Local custom often assigns the fee to the buyer, but it is negotiable and should be clearly allocated in the purchase contract.
When is the Land Bank fee due during a purchase?
- It is typically due at closing when the deed is recorded, and your closing agent collects and remits it or files an approved exemption.
Can I finance the Land Bank fee into my mortgage?
- Lender policy varies; many conventional lenders treat it as a closing cost that must be paid at closing, so confirm with your lender early.
Does the Land Bank fee change my appraisal or property taxes?
- The fee is a transactional cost and does not directly affect appraised value or assessed property taxes, though it impacts your cash to close.
Are family or estate transfers exempt from the fee?
- Some family, probate, or trust transfers may qualify under defined exemption categories, but eligibility and documentation must be verified.
What proof shows the Land Bank fee was paid or exempted?
- The recorded deed typically references payment or an exemption certificate, and your closing package should include the related receipt or filing.
