Buying in Cape Cod and the Islands: the full guide

Financing a second home from Europe

If you are moving to Massachusetts and this will be a second home alongside a main residence near Boston, you are in ordinary lending territory, with second-home terms. If you live in Europe and intend to stay there, the mainstream programmes are generally closed to you and the route is a foreign national loan: a larger down payment, a higher rate, and a lender that wants to see documented income and assets abroad.

Loan size matters too. The 2026 conforming limit is $832,750 in Barnstable County and $1,249,125 on both islands. At island prices most purchases need a jumbo loan. Our guide on funding a US home with European savings or equity covers how to move and document the down payment.

The costs that are not in the price

Land bank fee

Both islands fund land conservation through a 2% fee on most property transfers. On Nantucket the purchaser is liable for it by law. Budget for it as part of the price.

Deed excise

Barnstable County charges $6.48 per $1,000 of the price, higher than the $4.56 that applies in most of the state.

Septic systems

Where a home relies on a septic system, state rules known as Title 5 require an inspection within two years before a sale. The seller normally arranges it, and you must be given the report. A failed system is an expensive repair, so read it before you sign.

Property tax

Rates look gentle: $6.80 per $1,000 in Barnstable, $5.73 in Falmouth, $3.67 in Chatham, $3.12 on Nantucket and $2.48 in Edgartown for fiscal year 2026. Multiply by the assessed value and the bills are ordinary.

Insurance decides whether the numbers work

A lender will not close without home insurance, and on this coast it is no formality. Around 40% of Cape Cod and Islands homes were insured through the Massachusetts FAIR Plan in the latest state figures, up from a third a year earlier, because private insurers have been pulling back. Standard policies exclude flood, coastal policies often carry a named-storm deductible of 1% to 5% of the insured value, and homes in high-risk flood areas need separate flood insurance when the lender is federally backed.

Ask for the property's flood zone and for insurance quotes while your inspection contingency is still open. The premium is part of what the lender counts against your income.

Renting it out, and tax on the rent

Many owners let for part of the summer. Short stays are taxed at 5.7% by the state plus local options, and in all Cape Cod towns a further 2.75% goes to the water protection fund. You have to register with the state as an operator wherever you live.

For an owner who is not a US resident, US tax law adds a layer. Rental income from US property is taxed at 30% of the gross amount unless you elect to be taxed on net income, which lets you deduct expenses and requires a US tax return every year. That election is nearly always worth understanding before the first booking.

Estate tax for a holiday-home owner

Two taxes can apply on death. Federal law requires an estate tax return for a non-resident, non-citizen whose US assets exceed $60,000. Massachusetts requires one when the gross estate exceeds $2,000,000, and for a non-resident who owned Massachusetts real estate that test counts the worldwide estate. Whether your country has an estate tax treaty with the United States changes the federal picture, as our country comparison shows. Decide how to hold the property with a specialist first.

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