Understanding Rhode Island’s Non-Owner Occupied Property Tax
Own a second home in Rhode Island? The new Non-Owner Occupied Property Tax is based on occupancy, value, exemptions and more. Here’s what property owners should know.
If you own a second home or investment property in Rhode Island, a new state tax may deserve your attention. Whether it applies depends on more than simply owning multiple residences. Factors such as occupancy, assessed value, and qualifying exemptions can all affect whether a property is subject to the tax.
Understanding the basic rules, including the assessed value threshold, the 183-day occupancy test, and the available exemptions, can help owners determine whether the tax applies and what steps, if any, they should take.
Who may be affected?
The Non-Owner Occupied Property Tax generally applies to residential properties with an assessed value greater than $1 million that are not occupied by the owner for at least 183 days during the year.
Importantly, the threshold is based on the property's municipal assessed value, not its current market value. Beginning with tax years on or after July 1, 2027, the $1 million threshold will be adjusted for inflation.
Not every second home is subject to the tax
Meeting the owner-occupancy requirement of at least 183 days during the year is one way to avoid the tax, but it is not the only one. Rhode Island law also provides two important statutory exemptions:
- Long-term rentals that are subject to the Rhode Island Residential Landlord and Tenant Act and rented under a written lease for at least 183 days during the year.
- Qualifying short-term rentals that are subject to Rhode Island sales tax and rented for at least 183 days during the year.
These exemptions mean that some second homes and investment properties may avoid the tax even if they are not used as the owner's primary residence.
How is the tax calculated?
For properties that do not qualify for an exemption, the tax is based on the portion of the property's assessed value that exceeds $1 million.
The current rate is $2.50 for every $500 (or fraction thereof) of assessed value above the threshold. Because the calculation relies on assessed value rather than market value, owners should review their local assessment rather than relying on estimated sale prices.
Why you may receive an occupancy notice
The Division of Taxation uses available records to determine whether a property may be subject to the tax. If it cannot confirm that a property qualifies for an exemption, it may send the owner an occupancy attestation requesting additional information.
Receiving such a notice does not necessarily mean tax is owed. Instead, it provides an opportunity to demonstrate that the property is owner occupied or otherwise qualifies for an exemption by supplying supporting documentation.
Property owners who are subject to the tax remain responsible for payment even if they do not receive a notice.
Planning considerations
For families with vacation homes or multiple residences, the new tax provides another reason to periodically review how those properties fit within an overall wealth plan.
Occupancy patterns, rental arrangements, property assessments, and ownership structures may all influence whether the tax applies. Maintaining clear documentation can also make it easier to substantiate an exemption if requested.
Because every family's circumstances are different, there is no one-size-fits-all approach. A Corient wealth advisor can help evaluate how Rhode Island's new rules fit within your broader tax, estate, and wealth planning strategy and identify opportunities to plan proactively.
Source: Non-Owner Occupied Property Tax | RI Division of Taxation
ABOUT THE AUTHORS
Laura Williams
Laura is an Associate Partner, Tax in our New York office. Prior to joining Corient, Laura served as a Tax Director at legacy firm Geller Tax LLC. Prior to joining Geller, Laura started her career with Andersen in the firm’s Private Client Services group. Laura is responsible for working with clients to develop and implement strategies that are tailored to their financial goals, including income tax compliance services, income, gift, and estate tax planning, and compliance services for both private and public foundations. Laura received her Bachelor of Sciences in Accounting from Monmouth University in 2011 and her Juris Doctor from New England Law in 2014. Laura is a licensed attorney in both New York and New Jersey.
Mark Rubin
Mark is a Partner, Head of Tax Services in our New York office. Prior to joining Corient, Mark served as Managing Director, Head of Tax Services at legacy firm Geller Tax LLC. Previously, Mark was a Senior Managing Director at FTI Consulting and, earlier in his career, was a founding partner of Relative Solutions LLC. He also spent 12 years at Price Waterhouse as a Senior Tax Manager. Mark also served as a member of the Family Firm Institute Board, chaired two global conferences and the New York State Society of CPAs Family Office Committee. Mark is actively involved in philanthropic work and has served on many Boards. Mark is a frequent speaker, author, and source expert whose work has been published in InvestmentNews, and STEP Journal. Mark received a Bachelor of Science in Accounting from Pennsylvania State University and is a New York State licensed Certified Public Accountant.
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US 5662881 – July 2026
