Overview
Rhode Island’s 2026 Budget Bill introduces a new statewide tax on non-owner-occupied residential properties, widely referred to as the “Taylor Swift Tax.”
The nickname stems from Taylor Swift’s well-known Watch Hill mansion, a high-value Rhode Island vacation home that is typically unoccupied for much of the year. State legislators designed the tax to ensure that owners of luxury homes who do not primarily reside in them contribute more toward municipal and state services funded by real estate taxes.
Beginning July 15, 2025, and for every tax year thereafter, the State of Rhode Island will identify properties that meet the new criteria. The tax officially begins on July 1, 2026, requiring additional planning, record keeping, and financial strategy for affected owners.
Why the New Tax Was Created
According to the statute, owners of high-value, non-owner-occupied properties:
Do not always contribute a proportionate share of state and local service costs
Benefit from essential services funded by real estate taxes
Should be encouraged to use their properties in ways that prevent deterioration and support viable housing stock
The law is designed to incentivize productive use of properties and increase revenue from luxury homes not serving as primary residences.
Who Is Subject to the “Taylor Swift Tax”?
Not all non-owner-occupied properties qualify. To fall under the tax, a property must meet all of the following:
Qualifying Criteria
Assessed value exceeds $1,000,000, adjusted annually for CPI
Not used as the owner’s primary residence
Not occupied by the owner for at least half of the year
Example: If the property is rented for more than 183 days, the tax does not apply, and landlord-tenant rules govern instead
Tax starts July 1, 2026
Tax Rate and Example Calculation
Tax Rate
$2.50 per $500 of assessed value above $1,000,000
This tax is in addition to existing property taxes
Example
Assessed value: $3,000,000
$3,000,000 − $1,000,000 = $2,000,000
$2,000,000 ÷ $500 = 4,000 units
4,000 × $2.50 = $10,000 annual tax due
Payment Schedule
Paid quarterly, beginning March 15 of each taxable year
As of now, the State has not yet released regulations or forms, so further guidance is expected.
Preparing for the New Tax
If you own multiple properties or high-value vacation homes, this law could affect your long-term tax planning. Early preparation will help you understand eligibility, calculate potential tax impact, and explore planning opportunities.
Our team can help you evaluate your properties and prepare for compliance. For guidance, please call us at (401) 921-2000 or contact us here.