Moving forward, property owners should take note of new taxes introduced in the recently passed RI FY 2026 budget that impact residential real estate. Whether homeowners are offering short-term vacation rentals, selling their home, or own a non-owner-occupied second property valued over $1 million, new or increased taxes will become a part of their ongoing expenses.

Short-Term Rentals:

Though for years, Rhode Island property owners have managed to stave off the extension of the hotel lodging tax to whole-home and -condos rented for less than 30 days, this year the General Assembly voted to approve the bill. Starting on January 1st, 2026, , whole-homes and -condominiums rented less than 30 days will incur a 5% whole-home tax in addition to a 7% state sales tax and a 2% local hotel tax.

Residential Conveyance Tax:

Despite hundreds of member letters going to legislators and local, state and national news outlets sharing REALTORS®’ pleas to forego a conveyance tax increase on sellers, the measure passed with a 63% increase on sales. As of October 2025, on sales up to $800,000, a first-tier amount of $3.75/500 will be assessed to the seller. This rate is increasing from $2.30/500. For sales over $800,000, a $7.50/500 tax on the amount over $800,000 will be added to the first-tier amount. While we are disappointed by that result, our efforts to make homes affordable will continue.

Tax on Non-Owner-Occupied Residences Assessed Over $1 Million

Just days before the session ended, the House released a budget that included a new annual sales tax on non-owner-occupied properties assessed at more than $1 million that weren’t occupied by the owner(s) or tenants for at least 183 days per year. Amounts over $1 million will be taxed at $2.50/500 beginning July 1, 2026. There was no opportunity for testimony on this bill which passed despite far-reaching media outreach. RIAR will continue to educate legislators about the unintended consequences before the start of the next legislative session.