Rhode Island’s new tax on high-end second homes took effect this month, and its nickname has drawn most of the attention. Known as the “Taylor Swift tax”, it’s inspired by the pop star who owns the most expensive house in the state, a $28 million estate in Watch Hill. The tax reaches thousands of other owners, most of them nowhere near famous. But for some of them, the bill is a real strain.
The official name is the Non-Owner Occupied Property Tax, and it applies to homes assessed at more than $1 million that the owner does not live in or rent to a tenant for at least 183 days a year. It’s essentially a surcharge on expensive vacation homes that stand empty most of the year. The rate is $2.50 for every $500 of assessed value above the first $1 million, which, as you can imagine, gets pretty pricey over time.
That means a property assessed at $2 million would owe roughly $5,000 a year, and one at $3 million about $10,000. Swift’s Watch Hill estate, which has been assessed at more than $28 million, would face an increase of around $136,000 unless it qualifies for an exemption. The state has identified around 8,000 non-owner-occupied homes that may owe the tax and has mailed notices to the owners, and it could even rise to $24.5 million in its first year. That income is meant for building affordable housing…