Rhode Island Senate Bill S2759

Rhode Island 2022 Regular Session

• Introduced: 3/24/22
• Refer: 3/24/22

Caption

Real Estate Conveyance Tax

Impact

The enactment of S2759 is expected to have notable implications for both homeowners and investors in the Rhode Island real estate market. By facilitating a tax structure that applies to properties not used as primary residences, the bill could encourage owners of secondary and investment properties to contribute equitably to state funds, thereby potentially funding public projects or enhancing housing assistance programs. Conversely, this new tax rate may deter some investment in rental properties, particularly for out-of-state investors who may reconsider their property procurement strategies given the added taxation burden.

Summary

Bill S2759 introduces amendments to the Real Estate Conveyance Tax, specifically targeting the taxation of residential real properties that are not deemed primary residences. The bill imposes a flat tax rate of five percent (5%) on the assessed value of these properties, ensuring that any sale involving such real estate would contribute to state revenues. By setting this rate for non-primary residences, the bill aims to create a more balanced taxation system for real estate transactions and address concerns over housing affordability in the state.

Contention

While proponents of S2759 argue that the bill promotes fairness in taxation and generates necessary revenue, opponents raise concerns about the additional financial burden it places on property owners. Critics fear that homeowners who rely on rental income from secondary properties may find it less viable, leading to decreased availability of rental units and overall challenges in the housing market. Furthermore, there are fears that this new tax structure could disproportionately affect middle-class families who own second homes, compelling debate over the balance between revenue needs and the accessibility of housing.