Allows a municipality to set its own conveyance tax rate for residential properties sold in excess of $900,000.00 at $10 per $500. Provides collected taxes to be in a restricted account and distributed within 2 years for affordable housing.

Rhode Island Real Estate Conveyance Tax Bill

This bill would give Rhode Island cities and towns the option to charge an additional tax when high-priced homes are sold. Specifically, if a residential property sells for more than $900,000, a municipality could choose to apply a tax rate of $10 for every $500 of the sale price on the amount above that threshold. This is known as a "conveyance tax," which is essentially a fee paid when ownership of property transfers from one person to another. Each municipality would decide on its own whether to put this additional tax in place — it would not be automatically required everywhere.

The money collected through this tax would be set aside in a dedicated, restricted account — meaning it could not be spent on general government expenses. Local governments would then be required to distribute those funds within two years specifically for affordable housing purposes, such as building, maintaining, or supporting housing that lower- and middle-income residents can afford.

This bill primarily affects buyers and sellers of higher-end residential properties (those selling above $900,000) in any municipality that chooses to adopt the tax. Real estate professionals, developers, and local housing agencies could also be impacted, as the new revenue stream would be directed toward affordable housing projects in the community. The bill has been introduced and sent to the House Finance Committee for further review.