The Nantucket Real Estate Transfer Tax: What Buyers, Flippers & Developers Actually Pay

There are two Nantucket transfer taxes to keep straight. One is in force today: the 2% Nantucket Islands Land Bank fee, paid by the buyer on nearly every property transfer, funding land conservation. The other is a proposed 0.5% housing transfer fee on the portion of a sale above $2 million, paid by the seller, to fund year-round housing. That second one has passed Nantucket Town Meeting many times but is not yet law. For a flipper or developer, the Land Bank fee is a hard acquisition cost you pay going in, and the proposed housing fee is downside to underwrite at your exit.

Two Different Fees, Do Not Confuse Them

When people say “the Nantucket transfer tax” they are usually blending two separate instruments. Underwriting a deal requires telling them apart, because they hit different sides of the transaction and fund different things.

Both are separate from, and stack on top of, the Massachusetts statewide deeds excise, which the seller pays on essentially every deed recorded in the Commonwealth. Confirm the current excise rate with the Nantucket Registry of Deeds when you underwrite an exit.

The Land Bank Fee: What You Pay Today

The Nantucket Islands Land Bank was established by a 1983 act of the Massachusetts Legislature and ratified by island voters, and began operating the following year. It charges a 2% transfer fee on the purchase price of nearly every real estate transfer on Nantucket, and the money buys and protects open space, well over 3,000 acres to date. Critically for developers, the purchaser pays the fee at closing. The fee applies to the transfer itself, so buying a teardown or a vacant lot is taxed the same 2% on the full purchase price as buying a finished house. On an investment or teardown acquisition, that is a cost you absorb the day you buy, on top of the price, financing, and diligence.

There is a first-time buyer exemption: a buyer who has never owned real estate anywhere is exempt from the 2% on the first $1,400,000 of the purchase price (the exemption amount as of January 2026, and it has been raised over time). It comes with strings: the buyer must occupy the home as their domicile for at least five years, and the Land Bank records a lien to enforce that. Sell or move out early and the fee comes due with interest. Flippers and developers never qualify, the exemption is built for owner-occupant first-time homebuyers, not investors, so plan on the full 2% on any acquisition.

The Land Bank Act also carries a set of narrow exemptions for things like certain family transfers, transfers confirming existing ownership, and deed-restricted affordable housing. These are specific and documented on official exemption forms; if you think a transaction might qualify, verify it against the Land Bank Act and Rules and Regulations rather than assuming.

The Proposed Housing Transfer Fee: Status

Separately, Nantucket has spent nearly a decade trying to add a secondtransfer fee aimed at the island’s housing crisis. The proposal is a 0.5% fee on the portion of a sale price above $2 million, paid by the seller, with revenue dedicated to year-round and affordable housing. Town Meeting has approved the enabling home rule petition repeatedly since 2016, often unanimously.

It is not law. A local home rule petition of this kind needs the Massachusetts Legislature to pass it. Nantucket has approved it at Town Meeting for roughly a decade, but it has never once cleared the Legislature: successive versions have stalled in committee at the State House, opposed by statewide real estate interests, and lawmakers have said passage is not expected. In May 2026, the Town, with the Martha’s Vineyard Commission, the Nantucket Planning and Economic Development Commission, and the UMass Donahue Institute, released the first town-commissioned analysis of the idea, estimating the fee could raise roughly $3.3 million a year for Nantucket; the study also examines whether a fee like this would dampen sale prices or transaction volume. Underwrite it as a plausible future cost at exit rather than a current one, size the downside, and re-check its status before you close.

How It Changes Flip & Teardown Net Proceeds

On a flip you are both the buyer (at acquisition) and the seller (at exit), so both fees can touch the same project. Here is the round trip on a representative Nantucket renovation flip.

Today, the transfer-fee drag on that project is the $60,000 Land Bank fee at acquisition. If the housing fee passes, the same flip carries an additional $12,500 at exit, taking the combined transfer-fee cost to $72,500 on the round trip. Neither number includes the Massachusetts deeds excise or brokerage. The takeaway for underwriting: bake the full 2% into your acquisition budget every time, since you cannot exempt it away on an investment buy, and carry the 0.5% as an exit-side sensitivity on anything you expect to resell above $2 million.

For the rest of the renovation math that sits alongside these fees, see our Nantucket HDC & flippability guide, the current island median price, and the 2026 short-term rental rules that shape rental income between purchase and resale.

Frequently Asked Questions

This guide is general information for buyers and developers, not legal or tax advice. Transfer fee rates, exemption thresholds, and the status of proposed legislation change; verify current figures with the Nantucket Islands Land Bank, the Town of Nantucket, and the Nantucket Registry of Deeds before you transact.