Rhode Island to Increase Real Estate Transfer Tax in 2026: What Homeowners Should Know
Rhode Island to Increase Real Estate Transfer Tax in 2025: What Homeowners Should Know
While Rhode Island homeowners are not facing an increase in title fees, a significant change is here for anyone buying or selling property in the Ocean State. Effective October 1, 2025, Rhode Island’s real estate transfer tax—commonly referred to as the stamp tax—has increased substantially, representing the first major rate hike in years.
And this isn’t the only change on the horizon. Another new levy, dubbed the “Taylor Swift Tax,” is set to take effect on July 1, 2026, targeting certain high-value, non-occupied properties.
Understanding the Real Estate Transfer (Stamp) Tax
The real estate transfer tax—also called the stamp tax or conveyance tax—is a state-imposed fee assessed when property ownership changes hands. In most Rhode Island transactions, this tax is paid by the seller at closing and calculated based on the sale price of the property.
Funds collected from this tax help support state and municipal programs, including affordable housing initiatives and community development efforts.
What Changed on October 1, 2025
The Rhode Island General Assembly approved a 63% increase to the real estate transfer tax, which officially took effect on October 1, 2025.
- Previous rate: $2.30 per $500 of consideration (or $4.60 per $1,000)
- New rate: $3.75 per $500 of consideration (or $7.50 per $1,000)
This change means that for a home sold at $500,000, the transfer tax rose from $2,300 to $3,750—an increase of $1,450.
While title and recording fees remain unchanged, sellers should expect higher costs at closing under the new rate.
The “Taylor Swift Tax” — Effective July 1, 2026
Beginning July 1, 2026, Rhode Island will implement an additional property tax nicknamed the “Taylor Swift Tax” (formerly known as the non-utilization tax).
This tax is designed to address underutilized or vacant luxury properties and will apply to homes that meet both of the following conditions:
- The property is not occupied or rented for more than 183 days per year, and
- The property’s assessed value exceeds $1 million
For every $1,000 in value above $1 million, an additional $5.00 per thousand tax will apply.
Example: A $1.5 million second home that sits vacant more than half the year would incur a $2,500 “Taylor Swift Tax” annually.
This new tax will be assessed and collected by cities and towns, not the state, and is aimed primarily at second homes or investment properties that are not rented or used frequently.
What This Means for Sellers and Property Owners
For homeowners planning to sell, the transfer tax increase directly affects net proceeds at closing. If you’re preparing to sell in late 2025 or 2026, it’s important to account for this higher cost.
For property owners with second homes or investment properties valued above $1 million, the Taylor Swift Tax could introduce a new annual expense beginning in mid-2026—especially if the property is left vacant or underused.
Planning Ahead
These changes underscore the importance of advance planning and legal guidance in real estate transactions. At DeAngelis, McNamara & Cofone P.C., our real estate attorneys can help you:
- Understand how the new rates impact your specific property
- Structure transactions efficiently before or after the rate changes
- Review property use and rental plans to determine potential “Taylor Swift Tax” exposure
- Ensure all recording, title, and conveyance filings are handled accurately
Contact Us
If you are buying, selling, or managing property in Rhode Island, our team can help you navigate these new regulations confidently. Contact DeAngelis, McNamara & Cofone P.C. today at 401-737-6877 or visit our Contact Page.
Our attorneys are here to help you make informed real estate decisions under Rhode Island’s evolving tax laws.
