Nantucket Land Bank: The 2% Transfer Fee, Explained

Nantucket's Land Bank isn't a minor local program -- it's the first of its kind in the United States, funded by a 2% fee on most real estate transfers, and it has spent over $420 million acquiring or restricting land since 1983. Whether you're buying a specific parcel or evaluating what's left on the market, understanding this program is essential to understanding Nantucket land.

This page covers what's specific to Nantucket County. For the general explanation, see the national guide.

What the Land Bank is, and why it exists

The Nantucket Islands Land Bank was created by a special act of the Massachusetts Legislature in 1983, after being conceived by Nantucket's own Planning Commission and put to, and adopted by, island voters. It was the first land bank of its kind in the United States -- a dedicated public agency whose sole purpose is acquiring land (or conservation restrictions on land) to permanently protect it from development, funded by a real estate transfer fee rather than general tax revenue or a bond issue. The concept has since spread and been studied by conservation-minded communities elsewhere, including neighboring Martha's Vineyard's own land bank, but Nantucket's was the original.

The reasoning behind creating it in the 1980s was straightforward: Nantucket is a fixed, finite, and extremely desirable island with essentially no ability to expand its land area, facing sustained development pressure. Rather than relying only on zoning restrictions or after-the-fact conservation fundraising, the Land Bank gives the island a standing, self-funded mechanism to buy land outright (or buy development rights on land whose owners want to keep farming or otherwise using it) whenever a parcel worth protecting comes onto the market.

The 2% transfer fee: what it is, and what a buyer should confirm

The Land Bank's primary funding source is a 2% fee -- described in the enabling statute's current language as a registration fee -- levied on most real estate transfers on Nantucket. In practical terms, that means a buyer closing on Nantucket property should expect this fee to apply to the transaction and should confirm, before closing, exactly how it's calculated (typically against the purchase price above a statutory exemption threshold) and who is responsible for paying it in the specific purchase-and-sale agreement, since that allocation is a matter of contract negotiation between buyer and seller rather than a fixed statutory assignment.

The statute includes exemptions -- for certain transfer types, and the exemption threshold itself has been adjusted over time (reporting from local real estate publications has covered at least one increase to the Land Bank's exemption amount) -- but this page does not attempt to state the current exemption threshold or every category of exempt transfer, since these details change and are best confirmed directly with the Land Bank or a Nantucket real estate attorney before a specific transaction rather than assumed from a general description. What matters for due diligence purposes is simply this: budget for the fee as a real, statutorily authorized cost of buying land here, and verify its exact application to your transaction rather than assuming a generic percentage calculation.

What the Land Bank owns, and what that means for available inventory

The Land Bank's holdings are large relative to the size of the island. As of its most recent published figures, it holds 3,475 acres of land outright, plus another 503.4 acres protected through conservation restrictions it holds alone or jointly with the Nantucket Land Council. Since its founding, it has spent roughly $421.7 million on land acquisitions, funded almost entirely through the 2% transfer fee (fiscal year 2024 alone brought in $23,703,453 in transfer-fee revenue, down from $28,278,756 the year before, illustrating how directly the program's funding tracks the pace of the island's own real estate market). The cumulative effect: nearly half of Nantucket is now permanently protected open space.

For a prospective land buyer, this cuts two ways. On one hand, it means a meaningful share of what might otherwise have been developable acreage on Nantucket is permanently off the market, which affects available inventory and, indirectly, pricing on what remains. On the other hand, it means the island's rural, open, and undeveloped character -- one of its most valuable and distinctive features -- is genuinely durable rather than perpetually at risk from the next development cycle, since Land Bank holdings and conservation restrictions are, by design, permanent. Anyone evaluating land near a Land Bank property, or considering whether a given parcel might itself become a Land Bank acquisition target, should contact the Land Bank directly -- its interactive properties map and current acquisition priorities are the right starting point rather than assumptions based on this page's general figures, which will age as the program continues to acquire and spend.

The Nantucket Islands Land Bank: What a Buyer Needs to Know

What the Land Bank is, and why it exists

The 2% transfer fee: what it is, and what a buyer should confirm

What the Land Bank owns, and what that means for available inventory

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