Rhode Island Considers 'Taylor Swift Tax'

Newsweek

4 days ago

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
A new bill that would introduce higher taxes on luxury second homes in Rhode Island, nicknamed the "Taylor Swift Tax" after the Pennsylvania-born superstar, is causing quite a stir.
If enacted, the proposal would impose an additional charge on owners of luxury homes worth more than $1 million in Rhode Island who do not use them as their primary residences, including Swift, who owns the most expensive home in the state—the High Watch estate.
The singer-songwriter purchased the property in Watch Hill, a historic district in Westerly—which has a total of seven bedrooms and nine bathrooms—back in 2013 for $17.75 million. Since then, she has hosted high-profile, star-studded Independence Day parties in the colonial-style historic mansion, which inspired the song "The Last Great American Dynasty," included in Swift's 2020 Folklore album.
Newsweek contacted the Rhode Island Association of Realtors and Taylor Swift's publicist for comment by email on Tuesday.
What To Know About The 'Taylor Swift Tax'
Under the budget proposal—officially called the non-owner-occupied tax—owners of homes worth more than $1 million in Rhode Island that sit empty for over half of the year (more than 183 days) would pay an annual fee of $2.50 for every $500 of the home's value above $1 million. That means that Swift, who owns seven homes across the country including in New York City, Beverly Hills and Nashville, would have to pay an additional $136,000 a year in taxes should this proposal be approved.
Homes worth more than $1 million which are rented out for most of the year would not be subject to the surcharge.
Luxury homes in Watch Hill, Rhode Island.
Luxury homes in Watch Hill, Rhode Island.
Getty Images
Realtor.com data shows that the proposal would have a relatively big impact on the Rhode Island housing market. Listings for homes worth more than $1 million have more than doubled in the Ocean State over the past six years, going from 10.7 percent of all homes for sale in 2019 to 22.3 percent in mid-2025.
Between January and May, about one in five homes on the market in Rhode Island were priced above $1 million.
Investment in second homes has also increased over the past decade in the Ocean State: according to Realtor.com, just 3.76 percent of home loans in Rhode Island were issued for second homes, while investment property purchases accounted for 4.1 percent of all loans.
In 2021, 5.25 percent of home loans in the state were issued for second homes, while in 2024 8.1 percent were issued for investment properties.
Why Lawmakers Say The Bill Is Needed—And Why Real Estate Experts Are Skeptical
While the bill's supporters say that the measure will help increase housing affordability in the state, which has dropped dramatically in the years following the pandemic, critics say the move would discourage high-end vacation homebuyers and potentially have a chilling effect on the local market.
"Please, don't take from our housing market at the moment to balance the budget for other items, it's going to be detrimental," Chris Whitten, president of the Rhode Island Association of Realtors, said in comments shared with NBC 10 News.
According to Hannah Jones, senior economist at Realtor.com, the "Taylor Swift Tax" could have "a variety of impacts," on the Rhode Island market.
"High net worth households may just pay the tax, while other longtime owners may consider short-term leasing of their property to get around the higher tax assessment," she said in a recent press release. "It is possible that some owners would sell, but others may exhaust other options before letting go of their high-dollar real estate."
Watch Hill realtor Larry Burns told the Daily Mail that the so-called tax "is going to discourage people from buying second homes [in Rhode Island] because of the added expense" and harm tourism to the state.
"There's people like Taylor Swift—people will look at her and think, 'Well, she has so much money she'll never even notice an increase like this.' But it's not like the residents here have inexhaustible resources," Burns said. "$100,000 here might be college education for the year for a kid, or two kids."
The proposal would also hurt "older folks or multigenerational properties where the siblings have inherited the property," Burns said. "If you keep adding expenses people end up selling because they can't keep up with the cost."
Another Proposal Affecting Rhode Island Homeowners
Rhode Island lawmakers are also considering increasing the conveyance tax—a fee paid by sellers during home sales. The proposal would raise the rate from $2.30 to $3.75 per $500 of sale price, a 63 percent hike. Using Zillow's current median home price in Rhode Island of about $492,939, the typical conveyance tax payment would rise from $2,200 to approximately $3,700, according to WFLA calculations.
Lawmakers supporting the bill said that the money raised by the two proposals would go into funding affordable housing projects in Rhode Island. But several industry insiders and experts have voiced their opposition: the Rhode Island Association of Realtors has argued against both proposals, saying that they will have a detrimental impact on the local market, chilling demand and further tightening inventory in the state.
What Happens Next
The "Taylor Swift Tax" was greenlit as part of the proposed $13.9 billion state budget by the Rhode Island House of Representatives on June 18 with a 66 to 9 vote, and is now with the Senate. A final vote on the budget is expected by this summer.
If approved and signed into law by the state's governor, the new taxes could take effect as early as July 2026.