Creates new tax on gains from sale or exchange of real property held for short periods of time, 6 years or less, establishes a comprehensive framework to calculate and implement enforcement and provides imprisonment and/or fines for those who evade taxes.

Rhode Island Real Property "Flipping" Tax Bill

This bill would create a new state tax in Rhode Island specifically targeting profits made from selling real estate that was owned for six years or less. In other words, if someone buys a property and then sells it at a profit within that six-year window, they would owe this new tax on the money they gained from that sale. The shorter the time a property is held before being sold, the greater the tax burden is likely to be. The bill also sets up a detailed system for calculating how much tax is owed and how it would be collected and enforced.

The bill affects anyone — individuals, investors, or companies — who buys and sells real estate in Rhode Island within a six-year period at a profit. This could include real estate investors who "flip" houses for quick profit, as well as developers and landlords who sell properties relatively soon after purchasing them. Regular homeowners who sell their primary residence within six years could potentially be affected as well, depending on how any exemptions are written into the final law. The bill establishes consequences for those who try to avoid paying this tax, including the possibility of fines and even jail time for tax evasion.

The bill has been introduced and sent to the Senate Finance Committee for review, meaning it has not yet been voted on or signed into law. Its stated intent appears to be discouraging short-term speculative real estate transactions, though the full details of any exemptions or tax rate structure would be found in the complete bill text.