The Rhode Island House of Representatives approved the state’s $13.9 billion budget Tuesday by a vote of 66 to 9, advancing a plan that includes two major real estate tax changes aimed at addressing the state’s ongoing housing crisis.
The budget includes a new surcharge on second homes valued over $1 million—unofficially dubbed the “Taylor Swift Tax”—as well as a 63% increase in the real estate conveyance tax paid by sellers when transferring property.
The so-called “Taylor Swift Tax” targets non-owner-occupied residential properties that are not used as a primary residence for at least 183 days a year. These properties would be subject to an annual surcharge of $2.50 per $500 of assessed value above the first $1 million. For example, a $3 million second home would face a $10,000 annual fee.
Pop superstar Taylor Swift’s Watch Hill estate will see an additional $136,000 in yearly taxes if the measure becomes law.
The second change—the increase in the conveyance tax—would affect all property sales, regardless of value. The current rate of $2.30 per $500 of sale price would rise to $3.75, a 63% hike. Proceeds from both taxes are earmarked to support housing initiatives, including the expansion of affordable housing and low-income tax credits.
Supporters say the new measures will help address housing shortages, especially in communities where seasonal ownership drives up prices and reduces year-round availability. They argue that taxing high-end, often-vacant properties and home sales will provide much-needed funding to expand housing access across the state.
Critics, including real estate professionals and property owners, warn the taxes could chill investment, hurt the housing market, and place financial strain on longtime families who own coastal or inherited properties.
The budget now heads to the Senate, where a vote is expected in the coming days. If signed into law, the property tax surcharges would take effect in July 2026.
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