By Joshua Blumen, Esq.
There are two big updates on the horizon for Rhode Island real estate taxes — and if you own property here, especially high-value or non-owner-occupied homes, you’ll want to pay attention.
1. The “Taylor Swift Tax” (Non-Owner Occupied Property Tax Act)
You’ve probably heard it mentioned already — officially titled §44-72, the Non-Owner Occupied Property Tax Act, it’s been nicknamed the “Taylor Swift Tax.” But what does it actually mean, and who does it impact?
This new law targets residential properties not owner-occupied with an assessed value of $1,000,000 or more. In short, if you don’t live in the home for most of the taxable year, it falls into this category.
Important exception: This does not apply to rental properties. If you rent out the home for at least 183 days a year, you’re exempt.
How much is the tax?
- The rate is $2.50 per $500 of assessed value above $1,000,000.
- Example: A $1.5 million second home would owe an additional $2,500 per year.
Timeline: This won’t go into effect until July 1, 2026, giving property owners time to plan ahead.
2. Higher Real Estate Conveyance Taxes Starting October 1, 2025
The second change impacts all sellers of residential real estate in Rhode Island beginning October 1, 2025.
Currently, sellers pay a conveyance (or “excise”) tax based on the deed’s sales price at a rate of $2.30 per $500. For sales above $800,000, an additional $2.30 per $500 applies to the portion exceeding that threshold.
What’s changing?
- The base rate rises to $3.75 per $500 of the entire sales price.
- Properties over $800,000 will also owe an extra $3.75 per $500 on the amount above $800,000.
This represents a significant increase, especially for luxury properties. For anyone considering a sale, it could influence timing or require adjustments to closing budgets.
Bottom Line
Whether you’re a second homeowner, investor, or seller, these changes could directly affect your bottom line. Now is the time to consult with your real estate advisor, tax professional, or attorney to prepare for what’s ahead.
About the Author
Attorney Joshua Blumen is the Managing Partner of J.Blumen & Associates, where he counsels clients in all aspects of residential and commercial real estate transactions. With more than two decades of experience, Josh represents individuals, family offices, and businesses throughout Rhode Island and Massachusetts, offering strategic legal guidance on real estate investments, real estate-related business structuring, and estate planning.
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