Starting on July 1, 2026, owners of residential dwellings that are assessed at more than $1 million will be required to pay a new quarterly state property tax on the portion that is over $1 million unless the owners can document that (1) they live in the property for 183 days or more or (2) rent to tenants during the tax period.

The Rhode Island Division of Taxation sent a questionnaire several months ago to more than 9,000 property owners to help them determine whether they will owe a tax or qualify for an exemption. It is likely that all property owners have not been contacted.

Client Resources and FAQS

The Division of Taxation has created resources that you can share with your clients:   

• Non-Owner Occupied Property Tax Webpage
• Guidance Regarding the Non-Owner Occupied Property Tax
• FAQs
• Non-Owner Occupied Property Tax Regulation

Anyone with specific tax scenarios that are not addressed in the FAQs can contact the Excise Tax Section at [email protected]

Closings

Allow for at Least 10 Business Days 

For closings that are scheduled on or after July 1, 2026, sellers of property that the town or city has determined (1) is residential  and (2) assessed for more than $1 million as of December 31, 2025  must contact the Division of Taxation [email protected]. a minimum of 10 business days before a closing to request a Certificate of No Tax Due.   (The assessment – not the purchase price – is the trigger.)  According to the Division of Taxation, the request must be sent by the seller and not a real estate licensee or attorney because of the confidential information involved.   They must have a Certificate of No Tax Due in order to close.

Exempt Sellers

If a seller believes that he or she is exempt from the tax, the seller must still contact Taxation to request a Certificate of No Tax Due and include why the seller qualifies for an exemption. If the seller claims to have rented the property for more than 183 days per year,  the Division of Taxation will look to see whether the seller has reported rental income on the last income tax return, and/or registered with the state to collect sales taxes and whole home rental taxes if the rentals are short-term.

Future Sellers

If you’re working with a seller who may want to list with you in the future, you can encourage the seller to contact the Division of Taxation now to document that an exemption applies. That will help to speed up the closing process.

Buyers

It’s a good idea for both listing brokers and cooperating brokers to check the assessment since the buyer would be responsible for the tax in the future.  If you are working with a buyer of a property that is assessed for more than $1 million or with a purchase price of more than $1 million, it’s a good idea to provide the Division of Taxation FAQS to the buyer so the next tax bill won’t come as a surprise.  Even if the property is not yet subject to the tax, it could be in the future when the municipality reassesses the property.

REALTORS® only may contact [email protected].