Transfer fee bills remain in committee as lawmakers mull additional responses to affordability crisis
STATE HOUSE, BOSTON, May 13, 2026…..New fees on certain real estate transactions on Martha’s Vineyard and Nantucket would unlock millions of dollars for needed affordable units without negative market impacts, according to a new analysis that arrives as transfer fee bills remain bottled up in committees. Opponents of real estate transfer fees have warned they could negatively affect the housing market by reducing sales and home prices, and the UMass Donahue Institute report released Wednesday appears intended to address those assertions.
The report asserts there’s a different dynamic in “resort markets with limited supply and inelastic demand, like the islands and other seasonal communities,” where the impact of transfer fees on “transactions and prices will be minimal.” In the Hamptons in New York, where four towns in 2023 added a transfer fee to fund affordable housing and housing assistance programs, researchers found sales volumes “remained steady and consistent.”
Housing Costs and Workforce Pressures Intensify
The Martha’s Vineyard Commission and Nantucket Planning and Economic Development Commission requested the report, as the island communities try to appeal for remedies to alleviate severe shortages of affordable and “attainable” year-round housing. In 2024, median single-family homes prices hit $1.4 million on Martha’s Vineyard and $3.7 million on Nantucket, representing the most expensive housing in Massachusetts.
About 60% of the islands’ housing stock is seasonally vacant, which the report attributes to demand for second homes and short-term rentals from high-income buyers. Essential workers — including those in health care, public safety, public works and education — are increasingly struggling to keep their jobs amid sky-high housing costs, and employers are paying more in housing subsidies to retain them.
Projected Revenue and Policy Proposals
Proposed real estate transfer fees could generate more than $10 million on Martha’s Vineyard to fund housing initiatives, and over $3.8 million on Nantucket, according to the report. The money could be used to acquire and adapt existing housing, impose deed restrictions for affordable units, construct new housing, incentivize owners of short-term or seasonal rentals to offer the units to year-round residents, or enable local government to provide assistance to workers — with the strategies spurring various degrees of economic activity.
“This report clearly shows what islanders have known and have been lobbying for for over a decade,” Sen. Julian Cyr, a Truro Democrat, told the News Service. “Transfer fees in seasonal communities with a luxury real estate market work.” He added, “What we’re essentially asking of my colleagues is let Nantucket and Martha’s Vineyard help ourselves.”
Several real estate transfer proposals from Cyr have made it to the Senate Ways and Means Committee, after clearing the Housing Committee that he co-chairs. That includes a bill (S 966) allowing municipalities designated as “seasonal communities” — meaning they experience major seasonal employment shifts, based on the 2024 affordable housing law — to impose transfer fees ranging from 0.5% to 2%, with an exemption threshold of typically $1 million. Another bill (S 2981) would implement recommendations from the Seasonal Communities Advisory Council, including allowing local-option transfer fees of up to 2%.
With about 12 weeks remaining for lawmakers to pass major bills and get them into negotiating committees, Cyr said there are a “number of vehicles” to advance real estate transfer fees.
“I think there’s gonna be a few opportunities and bites of the apple, but I can’t say anything specific,” said Cyr, who noted he did not file any budget amendments to try to address the issue next week.
Opposition and Market Concerns
Cape and island communities have filed home rule petitions for transfer fees, though Cyr said those individual proposals are not expected to pass.
“I would also say our continued failure to be able to significantly stem the housing crisis on both islands and on many parts of the Cape is a significant burden on our businesses, on employers,” Cyr said. “It’s a drag on our economy.”
The Cape Cod and Islands Association of REALTORS opposes transfer taxes, calling them a “detriment” to the “entire real estate industry.”
“As the tax is levied only on buyers and sellers of property, the burden per taxpayer is much greater than the burden from a more broad-based tax designed to generate the same amount of revenue,” the association’s public policy guide states. “Inherently, a real estate transfer tax is an unstable revenue source and discriminatory, as it is unpredictable, and it only targets a specific action of the public and yet the revenues are typically used to benefit the community.”
Employer Survey and Real-World Impact
The UMass Donahue report incorporates a survey among nearly 300 employers on the islands that found just over half had lost workers over housing costs or had prospective hires decline offers because of housing unavailability. Some businesses on Martha’s Vineyard are paying nearly $13,000 annually per employee on housing subsidies, with that figure estimated at $18,000 on Nantucket.
On-the-Ground Perspective from Cape Communities
During a Cape Cod housing tour Tuesday, Cyr was driving Housing Secretary Juana Matias and Rep. Hadley Luddy around Truro when he was pulled over for allegedly speeding through a stop sign. Cyr said he got a warning, not a ticket, and used the opportunity to ask the officers how they are handling the housing squeeze.
Cyr said he learned that two of the officers lives in Plymouth, and the other in Sandwich.
“This speaks to the extent of the housing crisis here, where our police and public safety don’t live in our towns or in our next towns,” Cyr said. “They have like an hour-and-a-half commute to go to work every day — without traffic, by the way.”
