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 Senate Bill: Real Estate Conveyance Tax for Affordable Housing

This bill would give Rhode Island cities and towns the option to charge an additional tax when high-value homes are sold. Specifically, if a residential property sells for more than $900,000, the local municipality could choose to apply a tax rate of $10 for every $500 of the sale price. This is called a "conveyance tax," which is simply a fee charged when ownership of a property changes hands. Importantly, this would be an option for municipalities — not a requirement — so each city or town would decide for itself whether to adopt this additional tax.

The money collected from this tax would not go into a general fund. Instead, it would be placed into a dedicated, restricted account and must be used specifically for affordable housing purposes. The bill requires that these funds be distributed within two years of collection, ensuring the money is put to use relatively quickly rather than sitting unused.

This bill primarily affects buyers and sellers of high-end residential properties — those selling for over $900,000 — in municipalities that choose to adopt the tax. It does not impact the sale of lower-priced homes. Communities facing housing affordability challenges could use this as a tool to generate local funding for affordable housing projects without drawing from their general budgets. The bill has been introduced and referred to the Senate Finance Committee, where it will be reviewed before any further action is taken.