Starting July 1, 2026, Rhode Island’s FY 2026 budget adds a 0.5% annual surcharge on the portion of assessed value over $1,000,000 for non owner occupied residential properties used fewer than 183 days in a tax year. Properties rented more than 183 days are exempt. Primary residences are not affected. The statute sets the rate at $2.50 per $500 of value above $1,000,000.
Why it is called the “Taylor Swift Tax”
The nickname comes from Taylor Swift’s house “High Watch” in Watch Hill. Reports peg the property’s assessment around $28,000,000. Estimates widely used in coverage say her current property taxes are about $201,000 per year, and the new surcharge would add roughly $136,442, bringing the total near $337,442. That is about a 68% increase, roughly 1.7 times higher.
How it pencils out
$1,500,000 second home → about $2,500 per year
$2,000,000 → about $5,000
$28,000,000 → about $135,000 to $136,000 depending on the exact assessment and step rounding under $2.50 per $500
Homes rented more than 183 days in the prior year are exempt from the surcharge.
For short term rentals that do not reach 183 days, the surcharge becomes a new fixed annual cost that some owners will try to pass through to guests. How much prices move depends on the home value and the number of booked nights. Example, a $2,000,000 non owner occupied home owes about $5,000. If it books 60 nights, covering the surcharge would add roughly $83 per night. If it books 120 nights, the add is about $42 per night. Owners who want to avoid any increase may instead expand availability to meet the 183 day exemption, which could add to supply.
Why it matters in Newport
Supporters say the policy could nudge underused luxury homes toward year round use or active rental. The tax revenue would also help the community.
Critics in real estate say the surcharge falls on taxpayers who already contribute the most. Many affluent second homeowners pay substantial property taxes yet use limited local services because their primary residences are in New York, Boston, Palm Beach, Florida, or elsewhere. Their children do not attend local schools, and they rarely draw on police, fire, water, or other municipal services, since most stay about 10 to 12 weeks each year.
