2025 -- H 6257
========
LC002754
========
S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2025
____________
A N A C T
RELATING TO TAXATION -- REAL ESTATE CONVEYANCE TAX
Introduced By: Representative Arthur Handy
Date Introduced: April 23, 2025
Referred To: House Finance
It is enacted by the General Assembly as follows:
SECTION 1. Section 44-25-1 of the General Laws in Chapter 44-25 entitled "Real Estate 1
Conveyance Tax" is hereby amended to read as follows: 2
44-25-1. Tax imposed — Payment — Burden. 3
(a) There is imposed, on each deed, instrument, or writing by which any lands, tenements, 4
or other realty sold is granted, assigned, transferred, or conveyed, to, or vested in, the purchaser or 5
purchasers, or any other person or persons, by his, her, or their direction, or on any grant, 6
assignment, transfer, or conveyance or such vesting, by such persons that has the effect of making 7
any real estate company an acquired real estate company, when the consideration paid exceeds one 8
hundred dollars ($100), a tax at the rate of two dollars and thirty cents ($2.30) for each five hundred 9
dollars ($500), or fractional part of it, that is paid for the purchase of property or the interest in an 10
acquired real estate company (inclusive of the value of any lien or encumbrance remaining at the 11
time the sale, grant, assignment, transfer, or conveyance or vesting occurs, or in the case of an 12
interest in an acquired real estate company, a percentage of the value of such lien or encumbrance 13
equivalent to the percentage interest in the acquired real estate company being granted, assigned, 14
transferred, conveyed, or vested). The tax is payable at the time of making, the execution, delivery, 15
acceptance, or presentation for recording of any instrument affecting such transfer, grant, 16
assignment, transfer, conveyance, or vesting. In the absence of an agreement to the contrary, the 17
tax shall be paid by the grantor, assignor, transferor, or person making the conveyance or vesting. 18
(b) In addition to the tax imposed by subsection (a), there is imposed, on each deed, 19
LC002754 - Page 2 of 6
instrument, or writing by which any residential real property sold is granted, assigned, transferred, 1
or conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his, 2
her, or their direction, or on any grant, assignment, transfer, or conveyance or such vesting, by such 3
persons that has the effect of making any real estate company an acquired real estate company, 4
when the consideration paid exceeds eight hundred thousand dollars ($800,000), a tax at the rate of 5
two dollars and thirty cents ($2.30) for each five hundred dollars ($500), or fractional part of it, of 6
the consideration in excess of eight hundred thousand dollars ($800,000) that is paid for the 7
purchase of property or the interest in an acquired real estate company (inclusive of the value of 8
any lien or encumbrance remaining at the time the sale, grant, assignment, transfer, or conveyance 9
or vesting occurs, or in the case of an interest in an acquired real estate company, a percentage of 10
the value of such lien or encumbrance equivalent to the percentage interest in the acquired real 11
estate company being granted, assigned, transferred, conveyed, or vested). The tax imposed by this 12
subsection shall be paid at the same time and in the same manner as the tax imposed by subsection 13
(a). 14
(c) There is imposed, on each deed, instrument, or writing by which any commercial real 15
property sold is granted, assigned, transferred, or conveyed to, or vested in, the purchaser or 16
purchasers, or any other person or persons, by his, her, or their direction, or on any grant, 17
assignment, transfer, or conveyance or such vesting, by such persons that has the effect of making 18
any real estate company an acquired real estate company, when the consideration paid exceeds one 19
million five hundred thousand dollars ($1,500,000), a tax at the rate of three dollars and thirteen 20
cents ($3.13) for each five hundred dollars ($500), or fractional part of it, of the consideration in 21
excess of one million five hundred thousand dollars ($1,500,000) that is paid for the purchase of 22
commercial real property or the interest in an acquired real estate company (inclusive of the value 23
of any lien or encumbrance remaining at the time the sale, grant, assignment, transfer, or 24
conveyance or vesting occurs, or in the case of an interest in an acquired real estate company, a 25
percentage of the value of such lien or encumbrance equivalent to the percentage interest in the 26
acquired real estate company being granted, assigned, transferred, conveyed, or vested). The tax 27
imposed by this subsection shall be paid at the same time and in the same manner as the tax imposed 28
by subsections (a) and (b). 29
(c)(d) In the event no consideration is actually paid for the lands, tenements, or realty, the 30
instrument or interest in an acquired real estate company of conveyance shall contain a statement 31
to the effect that the consideration is such that no documentary stamps are required. 32
(d)(e) The tax shall be distributed as follows: 33
(1) With respect to the tax imposed by subsection (a): the tax administrator shall contribute 34
LC002754 - Page 3 of 6
to the distressed community relief program the sum of thirty cents ($.30) per two dollars and thirty 1
cents ($2.30) of the face value of the stamps to be distributed pursuant to § 45-13-12, and to the 2
housing resources and homelessness restricted receipt account established pursuant to § 42-128-2 3
the sum of thirty cents ($.30) per two dollars and thirty cents ($2.30) of the face value of the stamps. 4
The state shall retain sixty cents ($.60) for state use. The balance of the tax shall be retained by the 5
municipality collecting the tax. 6
(2) With respect to the tax imposed by subsection (b): the tax administrator shall contribute 7
the entire tax to the housing production fund established pursuant to § 42-128-2.1. 8
(3) With respect to the tax imposed by subsection (c): the tax administrator shall contribute 9
the entire tax to the Housing Resources and Homelessness restricted receipt account established 10
pursuant to § 42-128-2(3). 11
(3)(4) Notwithstanding the above, in the case of the tax on the grant, transfer, assignment, 12
or conveyance or vesting with respect to an acquired real estate company, the tax shall be collected 13
by the tax administrator and shall be distributed to the municipality where the real estate owned by 14
the acquired real estate company is located; provided, however, in the case of any such tax collected 15
by the tax administrator, if the acquired real estate company owns property located in more than 16
one municipality, the proceeds of the tax shall be allocated amongst said municipalities in the 17
proportion the assessed value of said real estate in each such municipality bears to the total of the 18
assessed values of all of the real estate owned by the acquired real estate company in Rhode Island. 19
Provided, however, in fiscal years 2004 and 2005, from the proceeds of this tax, the tax 20
administrator shall deposit as general revenues the sum of ninety cents ($.90) per two dollars and 21
thirty cents ($2.30) of the face value of the stamps. The balance of the tax on the purchase of 22
property shall be retained by the municipality collecting the tax. The balance of the tax on the 23
transfer with respect to an acquired real estate company, shall be collected by the tax administrator 24
and shall be distributed to the municipality where the property for which interest is sold is 25
physically located. Provided, however, that in the case of any tax collected by the tax administrator 26
with respect to an acquired real estate company where the acquired real estate company owns 27
property located in more than one municipality, the proceeds of the tax shall be allocated amongst 28
the municipalities in proportion that the assessed value in any such municipality bears to the 29
assessed values of all of the real estate owned by the acquired real estate company in Rhode Island. 30
(e)(f) For purposes of this section, the term “acquired real estate company” means a real 31
estate company that has undergone a change in ownership interest if (1) The change does not affect 32
the continuity of the operations of the company; and (2) The change, whether alone or together 33
with prior changes has the effect of granting, transferring, assigning, or conveying or vesting, 34
LC002754 - Page 4 of 6
transferring directly or indirectly, 50% or more of the total ownership in the company within a 1
period of three (3) years. For purposes of the foregoing subsection (e)(f)(2), a grant, transfer, 2
assignment, or conveyance or vesting, shall be deemed to have occurred within a period of three 3
(3) years of another grant(s), transfer(s), assignment(s), or conveyance(s) or vesting(s) if during the 4
period the granting, transferring, assigning, or conveying party provides the receiving party a 5
legally binding document granting, transferring, assigning, or conveying or vesting the realty or a 6
commitment or option enforceable at a future date to execute the grant, transfer, assignment, or 7
conveyance or vesting. 8
(f)(g) A real estate company is a corporation, limited liability company, partnership, or 9
other legal entity that meets any of the following: 10
(1) Is primarily engaged in the business of holding, selling, or leasing real estate, where 11
90% or more of the ownership of the real estate is held by 35 or fewer persons and which company 12
either (i) derives 60% or more of its annual gross receipts from the ownership or disposition of real 13
estate; or (ii) owns real estate the value of which comprises 90% or more of the value of the entity’s 14
entire tangible asset holdings exclusive of tangible assets that are fairly transferrable and actively 15
traded on an established market; or 16
(2) Ninety percent or more of the ownership interest in such entity is held by 35 or fewer 17
persons and the entity owns as 90% or more of the fair market value of its assets a direct or indirect 18
interest in a real estate company. An indirect ownership interest is an interest in an entity 90% or 19
more of which is held by 35 or fewer persons and the purpose of the entity is the ownership of a 20
real estate company. 21
(g)(h) In the case of a grant, assignment, transfer, or conveyance or vesting that results in 22
a real estate company becoming an acquired real estate company, the grantor, assignor, transferor, 23
or person making the conveyance or causing the vesting, shall file or cause to be filed with the 24
division of taxation, at least five (5) days prior to the grant, transfer, assignment, or conveyance or 25
vesting, notification of the proposed grant, transfer, assignment, or conveyance or vesting, the price, 26
terms and conditions thereof, and the character and location of all of the real estate assets held by 27
the real estate company and shall remit the tax imposed and owed pursuant to subsection (a). Any 28
such grant, transfer, assignment, or conveyance or vesting which results in a real estate company 29
becoming an acquired real estate company shall be fraudulent and void as against the state unless 30
the entity notifies the tax administrator in writing of the grant, transfer, assignment, or conveyance 31
or vesting as herein required in subsection (g)(h) and has paid the tax as required in subsection (a). 32
Upon the payment of the tax by the transferor, the tax administrator shall issue a certificate of the 33
payment of the tax which certificate shall be recordable in the land evidence records in each 34
LC002754 - Page 5 of 6
municipality in which such real estate company owns real estate. Where the real estate company 1
has assets other than interests in real estate located in Rhode Island, the tax shall be based upon the 2
assessed value of each parcel of property located in each municipality in the state of Rhode Island. 3
SECTION 2. This act shall take effect upon passage. 4
========
LC002754
========
LC002754 - Page 6 of 6
EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TAXATION -- REAL ESTATE CONVEYANCE TAX
***
This act would provide for an additional real estate conveyance tax of three dollars and 1
thirteen cents ($3.13) for commercial properties sold in excess of one million five hundred thousand 2
dollars ($1,500,000) for each five hundred dollars ($500), or factional part thereof over that amount. 3
This act would take effect upon passage. 4
========
LC002754
========