Martha's Vineyard Land Bank Commission changes transfer fee rules
The Martha's Vineyard Land Bank Commission will make two changes to the rules governing the processing of transfer fees. The changes apply to the sales of houses in the Martha's Vineyard Campmeeting Association's (MVCMA) property in Oak Bluffs and to the first-time home buyer's exemption. The new rules, adopted on August 13, will take effect November 1, for closings that occur on or after that date. The changes will, in some cases, increase the cost of each sort of transaction.
Established by an act of the state legislature in 1986, the Land Bank's income comes from a two percent real estate transfer tax on most land transactions. In the past, the Land Bank did not charge a fee on the sale of MVCMA houses, because the owners own the buildings but not the land, which is leased from the MVCMA.
"Technically speaking, because the campground land is subject to an annual lease, the Land Bank didn't assess a fee," executive director James Lengyel said in a phone conversation with The Times last week. "We asked an attorney to look into it, who said that because a person owns the building itself, its sale could be subject to the fee. The Land Bank commissioners thought out of fairness to everyone on the Island, the sale of campground cottages should be subject to the fee and voted to make that change."
The commissioners also amended the first-time home buyer's exemption to require that all parties on the purchase side be first-time home buyers.
Mr. Lengyel said for about the last 10 years, the Land Bank commissioners had experimented with allowing the exemption for a married couple, if only one of the individuals had never owned property. However, they found that many longtime property owners ended up getting the exemption because of their spouses.
"The commissioners concluded that defeated the purpose of the exemption, which was to give an advantage to people who are getting into real estate for the first time," he explained.
The Land Bank sent notices about the real estate transfer fee changes last week to every member of the Dukes County Bar Association and to all Island realtors, Mr. Lengyel said.