Rhode Island non-owner occupied property tax: who pays, how much

Rhode Island non-owner occupied property tax (RIGL 44-72): $2.50 per $500 of value over $1 million on homes not occupied 183 days, from 1 July 2026.

Rhode Island now charges a state tax on residential property assessed above $1,000,000 that is not the owner's primary residence and that the owner does not occupy for at least 183 days of the year. The rate is $2.50 for every $500 (or part of $500) of assessed value above $1,000,000, and it applies to tax years beginning on or after 1 July 2026. The Rhode Island Division of Taxation bills and collects it; your city or town does not.

What the law is

The tax sits in Rhode Island General Laws chapter 44-72, the Non-Owner Occupied Property Tax Act. It was enacted in the FY2026 state budget, H 5076 Substitute A, as amended, Article 5, section 18, in the 2025 session. The press calls it the "Taylor Swift tax" because of the singer's house in Watch Hill, Westerly. The name misleads: the Division's own analysis expects 4,000 to 5,000 properties to end up paying, and about one quarter of their owners live in Rhode Island.

The statute is short (fifteen sections). Most of the mechanics come from the Division's regulation, 280-RICR-20-75-1, which took effect on 28 June 2026, and from the Division's FAQ (March 2026) and Advisory ADV 2026-09 (16 March 2026). The statute states its purpose plainly:

For all of the reasons stated within this section, the purpose of this chapter is to "impose a statewide tax upon non-owner occupied residential property assessed at a value of one million dollars ($1,000,000) or more." (RIGL 44-72-2(l))

Who pays: three tests

You owe the tax for a year if all three of these are true.

1. The property is residential. The regulation uses your city or town's classification: "a property classified as residential by the city or town in which the property is located and assessed as such" (280-RICR-20-75-1.5(F)). The Division does not reclassify.

2. The assessed value is above $1,000,000. The statute's purpose clause says "one million dollars ($1,000,000) or more", while the rate section taxes value "in excess of" $1,000,000 and the Division's FAQ says "greater than $1,000,000". The difference does not matter in practice: at exactly $1,000,000 the tax is $0.

3. The property is "non-owner occupied". The statutory definition:

"Non-owner occupied" means that the residential property does not serve as the owner's primary residence and is not occupied by the owner of the property for a majority of days during a given taxable year. (RIGL 44-72-3)

The Division reads "majority of days" as 183 days or more in the privilege year, and says the days need not be consecutive. The regulation folds the two halves into one test: a property is non-owner occupied if it "is not occupied by the owner of the property for one hundred eighty-three (183) days or more during the privilege year" (280-RICR-20-75-1.5(B)). In its explanatory statement the Division argued that an owner who lives in a house for 183 days or more necessarily has their primary residence there and must file a Rhode Island resident income tax return. Note that the appeal section of the statute uses a third phrasing, "actively occupied by the owner during the taxable year for more than six (6) months" (RIGL 44-72-12). For how to count and prove the days, see how to prove you occupied your Rhode Island home for 183 days.

Some ownership situations the Division has addressed:

• LLC or other entity. Each member is jointly and severally responsible for the whole tax (280-RICR-20-75-1.6(A)).
• Trust. A home held in trust is not taxed if the person living there is authorized by the trust to live there, or official documents establish residency (FAQ Q15).
• Multi-family. The property is not taxed as long as one unit is owner occupied or qualifies for an exemption (FAQ Q19).
• Several owners, none reaching 183 days. The Division has not published guidance on shared family ownership as of September 2026.

The two exemptions

RIGL 44-72-5 exempts property rented for more than 183 days in the prior taxable year under the Residential Landlord and Tenant Act (chapter 34-18), and property rented and subject to sales tax under chapter 44-18 (short-term rentals). The regulation applies a 183-days-or-more test to both and lets you add the two kinds of rental together. Owner days and rental days cannot be combined: a house you lived in for 160 days and rented for 80 is taxed. Details, examples and proof are in the rental exemptions guide.

How much: the rate and the formula

The tax authorized by this chapter shall be measured by the assessed value of the real estate at the rate of two dollars and fifty cents ($2.50) for each five hundred dollars ($500) or fractional part of the assessed value in excess of one million dollars ($1,000,000). (RIGL 44-72-6)

That is 0.5% of the value above the threshold, rounded up to the next $500 step. The Division's formula: ((assessed value minus $1,000,000) divided by $500) times $2.50.

The first row shows the "fractional part" rule: any amount above the threshold, even $400, counts as one $500 step. The other three rows are the Division's own examples. What you paid for the house does not matter; a house bought for $500,000 and assessed at $1,300,000 is taxed on the $1,300,000 (FAQ Q10).

Which year and which value

The law works with two twelve-month periods and one valuation date.

• Privilege year: 1 July to 30 June. This is the year in which occupancy is measured. The statute calls it the "taxable year".
• Tax year: the following 1 July to 30 June, when the tax is billed and paid.
• Assessed value: the city or town value as of 31 December before the privilege year begins (280-RICR-20-75-1.5(A)).

Two consequences. The first privilege year (1 July 2025 to 30 June 2026) is already over: what you did with the house in that year decides the 2026 bill. And the value is older than you might expect: the statute says "as of December 31 of the corresponding taxable year", but the regulation and the FAQ apply the 31 December before the privilege year, so the 2026 bill uses the 31 December 2024 value. The Division's reading is the one on the bills.

If you have an open appeal of the assessment with your town, you still pay the state tax at the current assessed value and file a refund claim with the Division at the time you pay. The Division adjusts the tax once all appeals are resolved (FAQ Q11, 280-RICR-20-75-1.12).

The threshold rises with inflation from 2027

For tax years beginning on or after July 1, 2027, the assessed value threshold of one million dollars ($1,000,000) provided pursuant to this section shall be adjusted by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor Statistics determined as of September 30 of the prior calendar years. Said adjustment shall be compounded annually and shall be rounded up to the nearest five-dollar ($5.00) increment. In no event shall the assessed value threshold in any tax year be less than the prior tax year. (RIGL 44-72-6)

The regulation adds that the Division will publish the threshold each year (280-RICR-20-75-1.5(G)). The rate itself, $2.50 per $500, is not indexed.

Who bills you and how you pay

There is no return to file (FAQ Q7). At the start of each tax year the Division mails a notice showing the tax due and the four due dates, based on the best data it has. Before the first year it also mailed a questionnaire to owners of homes assessed above $1,000,000 whose primary residence or exemption it could not confirm; the Boston Globe reported more than 9,000 questionnaires. If you are subject to the tax and receive nothing, you are still responsible and must contact the Division at Tax.Property@tax.ri.gov (FAQ Q8).

The tax is due in four equal installments on 15 September, 15 December, 15 March and 15 June of the tax year, or in full by 15 September (RIGL 44-72-7(a), FAQ Q9). Late payment carries interest at the rate in RIGL 44-1-7 and a 10% penalty where the underpayment is due to negligence or intentional disregard (RIGL 44-72-9). Payment methods, hearings and appeals are covered in bills, due dates and how to pay.

Selling a home assessed above $1,000,000

The statute says nothing about sales, but the regulation does. For transfers on or after 1 July 2026 the seller must ask the Division for a Certificate of No Tax Due at least 10 business days before the transfer date, and who pays for the privilege year of the sale depends on whether the closing falls between 30 December and 30 June (seller) or between 1 July and 29 December (buyer). See the tax certificate before closing.

Where the money goes, and who is paying

RIGL 44-72-4(b) sends the entire tax to the state's low-income housing tax credit fund. The Division's April 2026 benefit-cost analysis put collections at about $25,000,000 a year; a state fiscal analysis cited by the Boston Globe counted 22,431 residential properties assessed above $1,000,000, flagged 8,245 as likely taxable, and projected $24,500,000 in the first year.

Proposed changes to watch

Bills filed in the 2026 session would have exempted seasonal, non-winterized cottages (S 2698, S 2682). S 2698 was held for further study in committee in March 2026, and only the General Assembly can create such an exemption. As of September 2026 neither the statute nor the regulation contains it: a seasonal cottage assessed above $1,000,000 is taxed unless it is rented 183 days or more (FAQ Q18).

Next steps

• [ ] Find your assessed value as of 31 December 2024 on your town's records (this drives the 2026 bill), and the 31 December 2025 value (2027 bill).
• [ ] Work out where you were for the privilege year 1 July 2025 to 30 June 2026: 183 days or more at the property, or rented 183 days or more, or taxed.
• [ ] Multiply: (assessed value minus $1,000,000) divided by $500, times $2.50; divide by four for each installment.
• [ ] Calendar 15 September, 15 December, 15 March and 15 June.
• [ ] Start a day log and a records folder for the current privilege year (1 July 2026 to 30 June 2027); it decides the 2027 bill.
• [ ] If you did not receive a notice or questionnaire and you think you are subject, email Tax.Property@tax.ri.gov or call (401) 574-8955.

Frequently asked questions

Sources

• RIGL chapter 44-72, Non-Owner Occupied Property Tax Act (Rhode Island General Assembly)
• RIGL 44-72-6, Rate of tax (FindLaw, code current to 1 January 2026)
• RIGL 44-72-3, Definitions (FindLaw, code current to 1 January 2026)
• 280-RICR-20-75-1, Non-Owner Occupied Property Tax, final regulation effective 28 June 2026 (Rhode Island Department of State)
• Non-Owner Occupied Property Tax, Rhode Island Division of Taxation
• Frequently Asked Questions, New Tax on Non-Owner Occupied Properties Assessed at over $1M (Division of Taxation, March 2026)
• ADV 2026-09, Guidance Regarding the Non-Owner Occupied Property Tax (Division of Taxation, 16 March 2026)
• Benefit-Cost Analysis, Non-Owner Occupied Property Tax 280-RICR-20-75-1 (Department of Revenue, April 2026)
• S 2698 of 2026, seasonal residence exemption bill (held for further study)
• Boston Globe, Rhode Island's Taylor Swift tax went into effect, who is paying it? (12 August 2026)
• Pierce Atwood, New Rhode Island Tax on Non-Owner-Occupied Properties Assessed at $1 Million or More (23 June 2025)

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