News Summary
Rhode Island has enacted the Non-Owner-Occupied Property Tax Act, imposing a tax on properties valued over $1 million. Known as the ‘Taylor Swift Tax’, this law aims to target high-value residential properties while generating revenue. Set to take effect in 2027, it includes provisions for annual adjustments and exemptions for properties rented over 183 days. Critics and supporters share concerns regarding its impact on the housing market and wealth distribution in the state.
Rhode Island has introduced a controversial new tax targeting non-owner-occupied residential properties valued at over $1 million, officially naming it the Non-Owner-Occupied Property Tax Act. The law, which has garnered public attention and discussion, is colloquially referred to as the “Taylor Swift Tax” after the famous musician who is known to own a luxurious home in the state.
Set to begin taking effect on July 1, 2027, the tax will impose a rate of $2.50 for each $500 of assessed value that exceeds $1 million. Consequently, a property assessed at $1.2 million will incur an annual tax of $1,000, while those valued at $2 million and $3 million will face taxes of $5,000 and $10,000 respectively. This design aims to generate revenue while targeting high-value investment and vacation properties.
In addition, the legislation includes provisions for annual adjustments to the $1 million threshold, which will be based on the Consumer Price Index for All Urban Consumers (CPI-U). The adjusted amount will be rounded up to the nearest $5 increment, ensuring that it cannot decrease compared to the previous year.
Several exemptions have been outlined within the new law. Properties that are rented for more than 183 days during the previous tax year and that are compliant with Rhode Island’s landlord-tenant laws will not be subjected to this tax. Property owners will still retain the right to appeal and challenge the new tax according to established procedures.
The Non-Owner-Occupied Property Tax Act represents a significant change in Rhode Island’s approach to property taxation, reflecting trends in home ownership and investments in rental properties. Over the past six years, the number of listings for homes valued above $1 million has more than doubled, indicating a booming market for high-end residential properties. With this context, lawmakers believe the tax may help address some associated challenges within the housing sector, although voices of concern are also vocal in opposition.
Critics argue that implementing such a tax could deter potential buyers of high-end properties and may lead to negative consequences within the local housing market. On the other hand, supporters assert that the tax exclusively targets a wealthy demographic that contributes to housing market issues, aiming for a fairer distribution of tax burden among property owners.
The proposal for this tax was included in a larger state budget plan totaling $13.9 billion. Should it receive the signature of Governor McKee, it could take effect as early as July 2026, leading to consequential changes in how luxury properties are managed in the state.
Furthermore, Rhode Island lawmakers are exploring a potential increase in the conveyance tax, which could further affect the housing landscape. Industry experts and the Rhode Island Association of Realtors have expressed concerns that these tax proposals could compound existing issues related to the housing shortage.
Senator Meghan Kallman, who supports the tax, emphasizes its role in generating necessary revenue for public services, aiming to balance responsibilities among property owners. It remains to be seen how these actions will influence the behavior of affluent homeowners, who may alter their strategies regarding property management—either by renting out properties more frequently or contemplating different ownership arrangements.
With the introduction of the Non-Owner-Occupied Property Tax Act, Rhode Island is undertaking measures that may reshape its property market, reflecting ongoing debates about wealth distribution, taxation, and housing availability in the state.
Deeper Dive: News & Info About This Topic
- Newsweek: Rhode Island Considers Taylor Swift Tax
- Boston Globe: Providence Tax Bills Delayed
- National Law Review: New Rhode Island Tax on Non-Owner-Occupied Properties
- Newport Buzz: Dave Portnoy Slams Rhode Island’s Taylor Swift Tax
- The Hill: Taylor Swift Tax for Rhode Island Luxury Homes
Author: STAFF HERE PROVIDENCE WRITER
PROVIDENCE STAFF WRITER The PROVIDENCE STAFF WRITER represents the experienced team at HEREProvidence.com, your go-to source for actionable local news and information in Providence, Providence County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as WaterFire, Rhode Island International Film Festival, and Rhode Island Comic Con. Our coverage extends to key organizations like the Greater Providence Chamber of Commerce and Providence Warwick Convention & Visitors Bureau, plus leading businesses in finance and manufacturing that power the local economy such as Citizens Financial Group and Textron. As part of the broader HERE network, we provide comprehensive, credible insights into Rhode Island's dynamic landscape.
