Beginning subsequent summer season, Rhode Island will impose a brand new property tax surcharge on luxurious second properties valued at or over $1 million that aren’t used as a main residence.
By itself, that tax won’t get quite a lot of consideration. Nevertheless, the brand new levy, which supporters say would assist deal with housing shortages and fund inexpensive housing packages, has been trending on social media, after being nicknamed the “Taylor Swift tax.”
Simply to be clear: Swift isn’t instantly concerned with the tax, however reportedly owns a sprawling $17 million mansion within the upscale Watch Hill space of Rhode Island, which might be topic to the brand new measure.
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In consequence, the property tax payment places the Ocean State on the forefront of a rising motion to tax house owners of high-end trip properties.
So the query on some owners’ minds is: May an analogous so-called “Taylor Swift Tax” be coming to your property in one other state? Right here’s extra to know.
What the ‘Taylor Swift Tax’ means for trip properties in 2026
Below what’s formally referred to as the Non-Proprietor Property Tax Act, the next will take impact in Rhode Island as of July 1, 2026:
- Rhode Island’s new tax will impression second properties valued at $1 million or extra as of Dec. thirty first of the tax yr and never used as a main residence or rented out for no less than 183 days per yr.
- The surcharge applies to each $500 of assessed worth above $1 million at a fee of $2.50 per $500.
- So, a $3 million second-home proprietor might face a surcharge of roughly $10,000 yearly, along with common property taxes.
The surcharge is designed to encourage house owners to both use their properties extra incessantly or make them accessible for hire, lowering the variety of empty homes. In response to state officers, the tax base will modify yearly for inflation beginning in 2027.
Whereas the tax targets all non-owner-occupied properties over $1 million, the affiliation with Swift’s beachfront property has made the nickname stick in headlines.
For instance, for Swift’s Watch Hill mansion, the tax will add roughly $136,000 yearly, reportedly practically doubling the present property tax invoice for that property.
Why Rhode Island is main the way in which
In Rhode Island, coastal cities have skilled hovering dwelling costs and a scarcity of inexpensive housing. Some say rich absentee house owners contribute to this by shopping for second properties, which have pushed costs up, leaving properties vacant for giant elements of the yr.
Some lawmakers see the “Taylor Swift tax” as a win-win strategy: generate new income to spend money on inexpensive housing and nudge absentee house owners to both use or hire their properties extra repeatedly.
However not everyone seems to be on board. Some actual property brokers and a few residents say that the tax unfairly penalizes individuals who already pay substantial property taxes and contribute considerably to native economies.
- The argument is that many of those second owners, together with long-time households and buyers, are important patrons of native companies, eating places, and providers, even when they don’t dwell there year-round.
- Critics additionally fear that the surcharge might chill the market, forcing some house owners to promote and probably harming cities that depend on second-home tourism income.
Will different states observe and improve property taxes on trip properties?
Rhode Island isn’t alone on this. Comparable surcharges on costly trip properties and second properties have been proposed or enacted in states like Montana and localities in California and Massachusetts.
Montana: Beginning in 2025, Montana applied a graduated property tax system that will increase charges on luxurious properties and non-primary residences. Properties valued above $1.5 million face a tax fee of two.2%, increased than the decrease brackets for extra modest properties. This new construction was signed into regulation by Gov. Greg Gianforte.
Cape Cod: Cape Cod is contemplating a 2% switch payment on luxurious dwelling gross sales over $2 million to assist fund inexpensive housing. The proposal, backed by native leaders and housing advocates, is at the moment underneath evaluate by the Barnstable County Meeting of Delegates. If accepted, the payment might generate as much as $56 million yearly to help year-round housing for working households, seniors, and younger folks.
L.A. “mansion tax”: As Kiplinger has reported, Los Angeles’ Measure ULA in California, the so-called “mansion tax,” was accepted by voters in 2022 and took impact in April 2023. As of July 1, 2025, it imposes a 4% switch tax on property gross sales between $5.3 million and $10.6 million, and a 5.5% tax on gross sales above $10.6 million, reportedly producing lots of of thousands and thousands of {dollars} for inexpensive housing and homelessness packages.
As state and native governments search for new income streams, these fashions might supply a framework for states trying to stability tax equity and affordability within the housing market.
Rhode Island ‘Taylor Swift Tax’: What owners have to know
In case you personal a second dwelling in Rhode Island — or are contemplating shopping for — be aware of this tax change. House owners planning to maintain their properties principally empty could face a steep surcharge beginning in mid-2026.
To keep away from the tax, house owners could must both make the house their main residence (spending no less than half the yr there) or hire it out for almost all of the time.
Whether or not the so-called “Taylor Swift Tax” succeeds might be a narrative that “Swifties,” owners, and policymakers will watch.
Within the meantime, take note of key tax adjustments in your state and seek the advice of a trusted tax skilled to grasp how any adjustments would possibly impression your backside line.
