The Land Bank fee: the 2% every Nantucket buyer should plan for
The line item that surprises off-island buyers
Every Nantucket closing includes a line item that surprises off-island buyers: two percent of the purchase price, payable to the Nantucket Islands Land Bank. On a $3 million house, that's $60,000 — real money, due at closing, and by statute it's the buyer's to pay.
It is also, dollar for dollar, one of the more defensible fees in American real estate. Here's how it works, who's exempt, and what it has actually bought.
What the Land Bank is
In 1983, Nantucket did something no community in the country had done: it created a land bank — a public entity funded by a fee on real estate transfers, with one job, buying and protecting open space. Conceived by the island's Planning Commission, approved by Town Meeting in a near-unanimous vote, and established by the Massachusetts Legislature (Chapter 669 of the Acts of 1983), the Nantucket Islands Land Bank became the model later copied by Martha's Vineyard and communities well beyond.
Forty-plus years on, the Land Bank stewards roughly 3,500 acres — beaches, moors, pond shores, walking trails — part of the nearly half of the island that is now permanently protected open space. When you walk from the Milestone Road bike path into the moors, or park at a Land Bank beach lot, you're using what the fee bought.
It's governed by a five-member commission, elected by Nantucket voters, and its books are public.
How the fee works
The math, at Nantucket prices
| Purchase price | Land Bank fee |
|---|---|
| $1,500,000 | $30,000 |
| $3,000,000 | $60,000 |
| $5,000,000 | $100,000 |
| $10,000,000 | $200,000 |
Budget it alongside your other closing costs from day one — it's usually the largest single item after the down payment itself. For the full picture of what a Nantucket closing costs, see our taxes and closing costs guide.
The first-time buyer exemption — bigger than people think
The headline most buyers miss: as of January 1, 2026, qualifying first-time buyers pay no Land Bank fee on the first $1,400,000 of the purchase price. That's up to $28,000 back in your pocket, and the threshold has climbed steadily — it was $1 million as recently as 2022. (The Commission reviews the figure annually; this page reflects the amount set December 2025.)
The qualifying rules are strict, and they're worth reading twice:
You still pay 2% on any amount above $1.4 million. A qualifying buyer closing at $2 million pays 2% of $600,000 — $12,000 instead of $40,000. If that's you, our first-time buyer guide is the companion read.
Other exemptions worth knowing
The statute lists fifteen exemption categories. The ones that come up in practice:
If your transfer might fit one of these, raise it with your closing attorney early — the forms are filed with the deed, not after.
Is anything about the fee changing?
The 2% rate has been stable since 1983, and no change to it is pending. Separately, Nantucket has for several years pursued a housing bank transfer fee — a distinct, additional fee that would fund workforce housing. It has not become law; a home-rule bill was still working through the Legislature as of mid-2026. If it ever passes, it would be a separate line item, not a change to the Land Bank's 2%. We track this in our market reports.
The honest take
Nobody enjoys writing a five-figure check at closing. But the Land Bank fee is the rare closing cost with a visible return: it's why a third of your morning run can be on protected trail, why the moors aren't subdivisions, and why the island your house sits on will look recognizably like itself in thirty years. It is, in a very real sense, the price of the moat — and the moat is what you're buying. If the parcel itself is the point, our land guide covers the buildable side of the equation, and the complete buyer's guide puts the fee in context of the whole purchase.
Land Bank fee — frequently asked questions
Who pays the fee — buyer or seller?
The buyer, by statute. Contract terms can shift the economics through credits, but the legal liability is always the purchaser's.How much is the fee?
2% of the total purchase price, due at the time of transfer. On a $3 million purchase, $60,000.Is there an exemption for first-time buyers?
Yes — and it's substantial. Qualifying first-time buyers (never owned property anywhere, will make Nantucket their domicile) pay no fee on the first $1,400,000 of the purchase price as of 2026. The amount is reviewed annually.Does the exemption have strings attached?
Yes: move in within a year, stay five years, and the Land Bank records a lien to enforce it. Sell early and the exempted fee comes due with 14% interest. Refinancing does not trigger it.Can the fee be avoided by structuring the deal?
No. The Registry of Deeds cannot record a deed without the Land Bank's certificate, and misstatements carry a 100% penalty. Legitimate exemptions exist — gifts, family transfers, trusts, divorce — and your closing attorney will file the right form if one applies.Is the fee tax-deductible?
No — it's a fee, not a tax. Ask your accountant how it affects your cost basis.What does the Land Bank actually do with the money?
Buys and stewards open space — roughly 3,500 acres to date: beaches, moors, trails, and pond shores held permanently for public use.Running numbers on a purchase?
Sean Kalman is a sixth-generation Nantucketer, a Nantucket REALTOR®, and the founder of The Kalman Co., brokered by eXp Realty. Every buyer he works with gets the full closing-cost picture before the offer, not at the closing table. Reach him at sean@thekalmanco.com or 508-228-4578. Equal Housing Opportunity.