Second Homes, New Math: RI’s Taylor Swift Tax vs. MA’s What-Ifs
Rhode Island just put a price on leaving luxury homes mostly dark. Starting July 1, 2026, owners of non-owner-occupied homes assessed at $1,000,000+ will owe an annual surcharge of $2.50 per $500 of value above $1M. Quick napkin math:
$1.2M second home → ($200,000 ÷ 500) × 2.50 = $1,000/yr
$3.0M second home → ($2,000,000 ÷ 500) × 2.50 = $10,000/yr
There are two notable carve-outs: (1) primary residences aren’t hit (we’ll see how long that lasts); and (2) properties rented >183 days under RI landlord-tenant law are exempt. So, if you’re a landlord, you NEED to keep track of the days the rental unit is occupied or you could be subject to the surcharge! The $1M threshold will increase annually beginning July 1, 2027. (Pierce Atwood)
I’ve been asked if MA is next with this “wealthy person” surcharge. The honest answer: not yet (but don’t rule it out). The much-discussed local-option transfer fee (0.5%–2%) above $1M or county median didn’t make the cut in 2024 and hasn’t been enacted since; some towns keep pushing home-rule petitions, but there’s no statewide mansion tax today (I’ve heard talk of Nov/Dec 2025… but nothing concrete yet).
Don’t think the wealthy in MA aren’t being hit. The answer to every liberal’s “wish list” is that the wealthy can pay for everything since they “take advantage” of everybody else. In their world, nobody has agency… but I digress.
High earners in MA are paying a 4% surtax on income over the indexed $1M threshold ($1,083,150 for 2025)—but that’s an income tax, not a property or transfer tax. (WBUR, Rocheford Law, progressivemass.com, Mass.gov)
Don’t think the RI legislature only attacked “the wealthy”. They stuck it to every property owner in RI by raising the conveyance tax by 63%, from $2.30 per $500 of sales price (or $4.60 per $1,000) to $3.75 per $500 (or $7.50 per $1,000)... for sales under $800,000 (about 12% of all sales in RI). If your home sells for more than that, they have a special add-on for you because, you know, how dare you to have done well in your life. (Rhode Island Current)
Just for comparison, the MA conveyance tax is $4.56 per $1,000.
If you have non-owner occupied property in RI, you should be having a conversation with your Realtor® and asking them to model the new annual carry. For some, listing before July 2026 (or converting to >183-day tenancy) beats holding. (Pierce Atwood)
If you're a buyer looking for investment property in RI, you need to take the annual surcharge into account when evaluating Net Operating Income to determine your annual cashflow.
Got questions about buying or selling in MA or RI? Call/text Ryan at (508) 524-1754 or book a free consult here → https://calendly.com/ryancook/real-estate-consult
