CONVEYANCE TIER 2 TAX THRESHOLD INCREASED TO $824,000 IN 2026
The Rhode Island Division of Taxation has announced that the 2026 Real Estate Conveyance Tax Tier 2 threshold, effective in 2026, is $824,000. More information is available in Advisory 2026-01.
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. The closing date is what triggers the tax. Sellers are responsible for paying the tax unless the seller and buyer agree otherwise.
The tax rate* varies based on the amount of the purchase price that is recorded on the deed.
| Purchase Price: | Q4 2025 Rate: | Rate on or after 1/1/26*: |
|
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 the Tier 2 threshold (Residential real estate only and acquired real estate companies) |
$2.30/$500 for the portion of the price over $800,000 | $3.75/$500 for the portion of the price over $824,000 |
*On and after January 1, 2026, 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 $824,000.
- Residential property formula: (Total Consideration Paid ÷ $500) x $3.75 plus (Consideration Paid over $824K ÷ $500) x $3.75 = Tax Due
*How are annual increases of the Tier 2 rate calculated? The tier 2 threshold is calculated pursuant to R.I. Gen. Laws § 44-25-1, which provides that for tax years beginning on or after January 1, 2026, the threshold is adjusted annually by the percentage increase in the Consumer Price Index for all Urban Consumers (CPIU), as published by the United States Department of Labor Statistics. The amount is determined as of September 30 of the prior calendar year. The adjustment is compounded annually, and statute provides it must be rounded up to the nearest $5.00 increment and can only be adjusted upward. For questions about Real Estate Conveyance Tax, contact the Rhode Island Division of Taxation’s Excise Tax Section by email at [email protected], or by phone at (401) 574-8955 between 8:30 a.m. and 3:30 p.m. on business days. 1 For more detailed information regarding the recent legislative changes impacting the real estate conveyance tax and the tier structure, please see Advisory 2025-13.