We want to make you aware of an important update regarding Rhode Island’s new Non-Owner Occupied Property Tax, which may apply to certain residential properties. This has also been referred to as the "Taylor Swift Tax."
What this tax is: Rhode Island has introduced an annual tax on residential properties assessed over $1 million that are not the owner’s primary residence. This generally applies to second homes, vacation rentals, and some investment properties. The tax rate is $2.50 for every $500 (or portion thereof) of the assessed value above $1,000,000.
Exemptions: You qualify for an exemption if your property meets either of the following:
- Long-term rentals: Properties rented under a written lease (per RI Landlord and Tenant Act) for 183 days or more during the year
- Short-term rentals: Properties subject to RI sales tax that are rented for 183 days or more during the year
Important notice information: The State began sending notices to property owners in March. However, we are hearing that some notices may have been sent to the rental property address instead of the owner’s mailing address, so you may not have received yours. Notices of assessment will be sent in July with first payments due on September 15.
What you need to know: If you receive a notice and are NOT subject to the tax, you will need to provide documentation to confirm your exemption or primary residency. If you ARE subject to the tax, you are responsible for ensuring it is paid, even if you do not receive a notice. Documentation will need to be provided annually.
Acceptable documentation includes:
- For owner-occupied properties: Driver’s license or tax return
- For long-term rental properties: A copy of the lease agreement
In-depth information about the tax and helpful FAQs can be found on the Division of Taxation's website. If your situation is unique or unclear, you can contact the Division of Taxation directly at: [email protected]
We recommend keeping an eye out for any correspondence from the State and addressing it promptly to avoid penalties or complications.
If you have questions or need help gathering documentation, feel free to reach out. We’re happy to assist.
