Just days before the legislative session ended in June, 2025, the House approved tax increases and new taxes on real estate. As a result, the state budget passed with increases to the conveyance tax on sales of real estate and the interest in an acquired real estate company that close on or after October 1, 2025. Even if a purchase and sales agreement is signed before October 1st, the closing date is what triggers the tax. Due to the anticipated amount of closings on September 30th, there may be a backlog of deeds to be recorded. Check with the conveyancing attorney.
Sellers are responsible for paying the tax unless otherwise agreed by the seller and buyer.
The tax rate varies based on the amount of the purchase price that is recorded on the deed.
| Purchase Price: | Current Rate: | Rate on or after 10/1/25: |
|
Conveyance tax on the entire consideration paid (All real estate and acquired real estate companies) |
$2.30/$500 | $3.75/$500 |
|
The consideration paid in excess of $800,000 (Residential real estate only and acquired real estate companies) |
$2.30/$500 | $3.75/$500 for the portion of the price over $800,000 |
On and after October 1, 2025, the formula for the calculation of the real estate conveyance tax is as follows:
- The tax rate is $3.75 per $500.00 (or fractional part) of consideration paid
- Formula: (Total Consideration Paid ÷ $500) x $3.75 = Tax Due
- An additional tax of $3.75 per $500 applies to the sale of residential real property for which consideration paid is over $800,000.
- Residential property formula: (Total Consideration Paid ÷ $500) x $3.75 plus (Consideration Paid over $800K ÷ $500) x $3.75 = Tax Due
The Rhode Island Division of Taxation has created a helpful explanation and examples that you can share with customers and clients.
For more information, contact the Excise Tax Section by emailing [email protected] or calling 401.574.8955.
REALTORS®: You can also download this flyer to explain these and other real estate tax changes resulting from the 2025 legislative session. If questions remain, contact the RIAR Legal Department at [email protected].