Buying on Block Island and hearing about a 3 percent fee at closing? If you are looking around New Harbor in New Shoreham, this line item can surprise even seasoned buyers and sellers. You want a clear picture of what it covers, who pays it, and how to plan for it so your closing stays on track. This guide breaks down the 3 percent Land Trust fee, how it interacts with other Rhode Island taxes, and the simple steps to avoid delays. Let’s dive in.
What is the 3 percent Land Trust fee?
The Town of New Shoreham collects a 3 percent transfer fee on most property sales to fund the Block Island Land Trust. The Land Trust acquires and manages open space, coastal, and agricultural lands on the island, and the town reports that about 46.1 percent of Block Island’s acreage is preserved. You can learn more about the trust’s purpose and preservation mission on the town’s Block Island Land Trust page.
- Learn more: the town’s overview of the Block Island Land Trust.
How the fee works in New Harbor closings
The rate and who pays
- The standard rate is 3.0 percent of the purchase price for most transfers in New Shoreham. The town details this in its Land Trust form and filing requirements.
- Buyers typically pay the fee at closing in local practice, although the purchase contract can allocate it differently. The town’s recording guidance notes the typical payer and other recording details on the Recording and Land Records page.
Special cases and exemptions
- Timeshares are calculated on one quarter of the purchase price, which effectively reduces the fee to 0.75 percent of the full price. The town explains this on the Land Trust form and filing requirements.
- Certain transactions may qualify for exemptions. If you believe your transfer is exempt, you will use Certificate B and provide documentation per the town’s instructions on the Recording and Land Records page.
- Foreclosure purchases and mortgagee acquisitions are subject to the fee. The Rhode Island Supreme Court confirmed this in a published decision, which you can review here: Block Island Land Trust v. Washington Trust Co..
How you pay at closing
- Bring a separate certified, bank, or attorney’s check payable to “Block Island Land Trust” for the fee. The town provides payee and check instructions within the Land Trust form and filing requirements.
- The Land Trust fee cannot be paid through e‑recording. If your title company uses e‑recording for documents, the BILT check still needs to be mailed or hand-delivered ahead of recording. The town outlines this on the Recording and Land Records page.
- Every deed must be accompanied by Land Trust Certificates. Certificate A is filed with all deeds, Certificate B is for exemptions, and Certificate C is used for entities such as corporations or LLCs. Recording fees for these certificates are set by the town and listed on the recording page.
How it fits with other closing costs
- The 3 percent Land Trust fee is separate from the Rhode Island conveyance tax. The state conveyance tax stamp is collected at recording and follows a tiered rate that increases for consideration above 800,000 dollars. The town posts the current structure on the Recording and Land Records page.
- You will also see standard town recording fees, certificate recording fees, and typical third-party closing costs like title, attorney, lender fees, inspections, and prorations. These are separate line items from the Land Trust fee.
Real numbers: simple examples
These samples illustrate only the Land Trust fee and the state conveyance tax. They do not include recording fees, certificates, title charges, or other closing costs.
Example A — purchase price 500,000 dollars:
- Land Trust fee at 3 percent: 15,000 dollars.
- RI conveyance tax using the town’s noted rate of 3.75 dollars per 500 dollars: 3,750 dollars.
- Combined (Land Trust plus conveyance tax): 18,750 dollars.
Example B — purchase price 1,000,000 dollars:
- Land Trust fee at 3 percent: 30,000 dollars.
- RI conveyance tax: the first 800,000 dollars at 3.75 dollars per 500 dollars equals 6,000 dollars, and the 200,000 dollars above 800,000 dollars at an additional 3.75 dollars per 500 dollars equals 3,000 dollars, for a total of about 9,000 dollars.
Timeline and checklist for a smooth closing
Early in the contract
- Decide who pays the Land Trust fee. Buyers usually pay, but you can negotiate this in the purchase agreement. See the town’s Recording and Land Records page for local practice context.
Before closing
- Confirm whether your transfer claims an exemption. If yes, complete Certificate B and gather required documentation per the town’s instructions on the Land Trust form and filing requirements.
- Prepare a separate certified, bank, or attorney’s check payable to “Block Island Land Trust.” Do not combine it with town recording or stamp payments.
- Coordinate delivery. Since e‑recording cannot process the BILT payment, arrange mailing or hand delivery of the check to the Town Clerk ahead of recording as directed on the Recording and Land Records page.
Day of closing
- Your settlement agent will present the deed with Certificate A and any applicable B or C forms, the BILT check, and payment for recording fees and state conveyance tax to the Town Clerk. The town’s recording page provides contact details and procedures.
Tips for buyers and sellers in New Harbor
- Budget early for the 3 percent fee and the state conveyance tax so there are no surprises.
- Clarify cost allocation in your offer if you want to deviate from the local norm where buyers cover the Land Trust fee.
- If you are purchasing a timeshare, confirm the calculation uses one quarter of the purchase price.
- Work closely with your title or closing agent on timing, since the Land Trust check must be physically delivered to the town.
- For insight into how funds are used, review the town’s Land Trust fiscal reports.
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FAQs
Who pays the 3 percent Land Trust fee on Block Island?
- Buyers typically pay at closing in New Shoreham, but the purchase contract can allocate the fee differently. The town notes this practice on the Recording and Land Records page.
Is the Land Trust fee separate from Rhode Island’s conveyance tax?
- Yes. The 3 percent Land Trust fee is a local transfer fee that is separate from state conveyance tax and town recording fees. See the Block Island Land Trust overview.
Do timeshare purchases pay the full 3 percent?
- No. Timeshares are calculated on one quarter of the purchase price, which lowers the effective fee. The town explains this on the Land Trust form and filing requirements.
Can I include the Land Trust fee in e‑recording?
- No. The Land Trust payment cannot be made through e‑recording, so plan for a paper check that is mailed or delivered ahead of recording. Details are on the Recording and Land Records page.
Does the 3 percent fee apply to foreclosure purchases?
- Yes. The Rhode Island Supreme Court held that foreclosure sales and mortgagee acquisitions are subject to the fee. See Block Island Land Trust v. Washington Trust Co..
How do I claim an exemption from the Land Trust fee?
- Use Certificate B and provide supporting documentation as instructed by the town. The forms and guidance are on the Recording and Land Records page.