Includes non-owner-occupied residential properties used for short-term rentals for tourist or transient use to be assessed as Class 2 properties on or after the assessment date of December 31, 2024.
Impact
The introduction of S2018 is expected to have significant ramifications for local taxation practices, especially regarding how municipalities assess taxes on residential properties. By classifying short-term rentals as Class 2 properties, local governments will have the authority to levy different tax rates compared to owner-occupied residential properties. This change is designed to ensure that properties utilized for commercial purposes are taxed in a manner that reflects their use, ultimately influencing local revenue and potentially aiding in housing stability.
Summary
Bill S2018, introduced by Senator Dawn M. Euer, proposes amendments to the existing taxation law concerning the classification of property in Rhode Island. Specifically, the bill seeks to include non-owner-occupied residential properties that are utilized for short-term rentals, such as those listed on platforms like Airbnb, to be categorized as Class 2 properties beginning from the assessment date of December 31, 2024. This adjustment aims to address the growing trend of short-term rentals and their impact on local housing markets.
Contention
Discussion surrounding S2018 has revealed a variety of viewpoints among legislators and stakeholders. Proponents of the bill argue that it provides a necessary update to local taxation laws to capture the economic activity generated by short-term rentals, thereby ensuring fair tax contributions align with property usage. However, opponents voice concerns that this classification may deter property owners from renting their homes short-term, thus constraining the availability of temporary housing options. Additionally, there is apprehension over whether local governments may misuse their taxing authority in ways that could further complicate housing crises in communities already struggling with affordability.