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: Higher Property Transfer Tax on Expensive Home Sales to Fund Affordable Housing

This bill would give Rhode Island municipalities the option to charge an additional tax when high-priced homes are sold within their borders. Specifically, if a residential property sells for more than $900,000, a town or city could choose to apply a tax rate of $10 for every $500 of the sale price. This is a local option, meaning each municipality would decide for itself whether to adopt this additional tax — it would not automatically apply statewide.

The money collected from this tax would not go into a city or town's general budget. Instead, it would be placed into a dedicated, restricted account and would have to be spent within two years specifically on affordable housing initiatives. This is meant to ensure the funds are used to help create or support housing options for lower- and moderate-income residents, rather than being used for other municipal expenses.

This bill primarily affects buyers and sellers of higher-end residential properties — those selling for more than $900,000 — in any municipality that chooses to adopt the tax. It also affects local governments, giving them a new tool to raise money for affordable housing without raising broader taxes. Developers, housing nonprofits, and residents seeking affordable housing could potentially benefit from the funds generated.

Currently, the bill has been referred to the Senate Housing and Municipal Government Committee and is scheduled for a hearing. The committee has recommended holding it for further study, meaning it has not yet advanced through the legislative process.