Rhode Island’s new non-owner-occupied property tax: Who owes it and when to pay
Rhode Island has begun mailing assessment notices for a new state tax on qualifying non-owner-occupied residential properties assessed above $1 million. The first payment for the July 1, 2026, through June 30, 2027, tax year is due September 15, 2026.
The tax took effect July 1, 2026. Owners who receive a notice but believe the property is exempt can submit documentation to the Division of Taxation. Owners who do not receive a notice but believe the tax applies remain responsible for contacting the Division and paying what is owed.
Which properties are covered
The tax applies to property that is classified as residential by its city or town and has a municipal assessed value above $1 million. The threshold is based on assessed value, not the purchase price or current market value.
For the first tax year, the state uses the property’s assessed value as of December 31, 2024. The occupancy or rental test covers the separate privilege year from July 1, 2025, through June 30, 2026.
A property generally is considered non-owner occupied when it does not serve as the owner’s primary residence and the owner does not occupy it for at least 183 days during that privilege year. The days do not have to be consecutive.
How much the tax is
The rate is $2.50 for every $500, or fractional part of $500, in assessed value above $1 million.
For example, a residential property assessed at $1.2 million has $200,000 of value above the threshold. The annual tax would be $1,000, or four quarterly payments of $250.
The first $1 million of assessed value is not included in this calculation. Beginning with tax years on or after July 1, 2027, the threshold will be adjusted for inflation.
Primary residences and rental exemptions
A primary residence can qualify for an exemption when the owner lives there for at least 183 days during the privilege year. A Rhode Island resident income tax return, driver’s license and other official records may help establish residency.
Long-term rentals generally qualify when they are covered by a written lease or rental agreement and rented for at least 183 days during the privilege year. Qualifying short-term rentals subject to Rhode Island sales, hotel or whole-home rental taxes also can qualify when rented for at least 183 days.
Rental days do not have to be continuous, and qualifying long-term and short-term rental days may be combined. But a second home, seasonal property or short-term rental is not automatically exempt. A property rented for only part of the summer, for example, may remain subject to the tax.
For a multifamily property, the Division says the property is not subject to the tax when at least one unit is owner-occupied or qualifies for an exemption. Owners with properties held by trusts or other legal entities may need additional records to establish residency or exemption status.
What notices mean
The Division sends notices based on its best available records to owners whose properties appear to exceed the threshold but whose primary-residence or exemption status cannot be confirmed. An assessment notice does not by itself establish that the tax is owed.
Owners who believe a property is exempt should respond with records such as leases, rental-payment records, tax returns, utility bills, bank statements or other documents showing occupancy or rental activity during the applicable privilege year. The regulation requires taxpayers to retain relevant records for three years after the end of the tax year, unless a longer period applies because of litigation or prosecution.
Owners do not file a conventional tax return for this tax. The Division sends a notice with the amount due and payment dates. But failure to receive a notice does not eliminate the obligation to pay if the property is taxable.
Payment dates and how to pay
The tax may be paid in four equal installments due:
- September 15, 2026
- December 15, 2026
- March 15, 2027
- June 15, 2027
Owners also may pay the full annual amount by September 15. Payments are made through the Rhode Island Tax Portal’s Same-Day Services menu. A portal account is not required. Owners need the account and invoice information from the assessment notice and their banking information.
The Division says payments made through that process are scheduled for the same day and cannot be scheduled in advance. Owners should retain the notice because the account and invoice information will be needed for later installments.
Appeals, records and property transfers
An open municipal assessment appeal generally does not suspend payment. For the first tax year, the state uses the December 31, 2024, assessment. Owners must pay based on the current assessment and file a refund claim when paying if they are seeking an adjustment tied to an assessment appeal. After the municipal appeal is resolved, the owner can provide official documentation to the Division.
A taxpayer who disagrees with the Division’s non-owner-occupied tax determination may request an administrative hearing, generally by notifying the Tax Administrator in writing within 30 days of the notice. The hearing process does not decide the municipal assessment value, property classification or registered ownership record.
Property-transfer responsibility can depend on the transfer date and the privilege-year rules. For some transfers, the seller must obtain a Certificate of No Tax Due before closing; buyers and sellers should not assume that one side is automatically responsible in every transaction.
Owners with questions about a notice, exemption, assessment appeal or missing bill should contact the Division of Taxation at Tax.Property@tax.ri.gov or 401-574-8955. The first payment deadline is September 15, 2026.
Sources
- Rhode Island Division of Taxation: Non-Owner Occupied Property Tax
- Rhode Island Regulation 280-RICR-20-75-1
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