Non-Owner Occupied Property Tax

The Non-Owner Occupied Property Tax is a tax imposed on residential properties that are not occupied by the owner for 183 days or more in a privilege year. This tax applies to properties that are classified as “residential properties” by the city or town with an assessed value greater than $1,000,000. 

There are two types of exemptions addressed in Question 6 of this document.

For tax years beginning on or after July 1, 2027, the $1,000,000 threshold will be indexed for inflation.

A property is “non-owner occupied” if it is a residential property that does not serve as the owner’s primary residence and is not occupied by the owner for 183 days or more of the privilege year.

Yes, there are two exemptions as follows:

1. Any long-term rental subject to R.I. General Laws § 34-18 (Residential Landlord and Tenant Act) under written lease or rental agreement where the property is rented for 183 days or more of the privilege year.
2. Any short-term rentals subject to sales tax under R.I. General Laws § 44-18, where the property is rented for 183 days or more during the privilege year.

The assessed value of the residential property is determined by the city or town in which the property is located as of December 31 prior to the beginning of the privilege year. For example, for the tax year beginning on July 1, 2026, the privilege year is July 1, 2025 - June 30 2026, and the assessed value as of December 31, 2024 is used.

The Non-Owner Occupied Property Tax rate is $2.50 for each $500 (or fractional part thereof) of the assessed value in excess of $1,000,000.*

Non-Owner Occupied Property Tax formula: 

        ((Assessed value minus $1,000,000) ÷ $500) x $2.50 = Tax Due

Example: A non-owner occupied property is assessed at $1.2M and is unoccupied for 200 days each year.

Calculation: 

(($1,200,000 - $1,000,000) ÷ $500) x $2.50 = tax owed annually        

($200,000 ÷ $500) x $2.50 = $1,000 tax owed annually

Please refer to the chart below for examples of how the tax is calculated:

* For tax years beginning on or after July 1, 2027, the assessed value threshold of $1,000,000 shall be adjusted by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U).

A privilege year is the period of July 1 through June 30 directly preceding the tax year. Also known as "taxable year.”

The tax is due and payable in 4 equal installments. The four installments are due September 15, December 15, March 15, and June 15 of the tax year. 

The tax due may also be paid in full as one lump sum payment by September 15th.

Quick Reference Chart:

The classification of the property as residential is determined by the city or town in which the property is located. This same classification is used for the administration of this tax.

No. The Division will send out a notice for each taxable property with the tax owed and payment due dates at the beginning of each tax year based on best available records. If you do not receive a notice but are subject to this tax, you should contact the Division of Taxation at Tax.Property@tax.ri.gov.

The Division will send a notice to those property owners with properties assessed at greater than $1M who the Division cannot confirm, without additional information, whether the property is the owner’s primary residence or if the owner qualifies for an exemption, based on best available records. If the property owners receive a notice and are not subject to the tax, the property owners will have an opportunity to provide supporting documentation to demonstrate that the property is their primary residence or that an exemption applies. Owners of property subject to this tax that do not receive a notice are still responsible for ensuring that the tax is paid and should contact the Division of Taxation at Tax.Property@tax.ri.gov.

No. The property is subject to the tax if the property has an assessed value by the city/town of more than $1 million and is not occupied for 183 days or more in a privilege year. 

If a taxpayer has appealed the assessment of the property value with the municipality, the taxpayer is still responsible for paying the Non-Owner Occupied Property Tax at the current assessment value. Official documentation verifying the updated assessed value must be provided to the Division of Taxation after all appeals have been resolved. 

The taxpayer must file a refund claim at the time they pay the Non-Owner Occupied Property Tax. The Division will modify the tax due for the property upon resolution of all appeals. 

For the tax year beginning July 1, 2026, the assessed value of the residential property as of December 31, 2024 is used.

If your appeal is based on an assessed value after December 31, 2024, the open appeal does not affect the tax due for the July 1, 2026 through June 30, 2027 tax year.

A primary residence is a residential property where a taxpayer lives for at least 183 days within the privilege year.  In most cases, the primary residence would be used on a taxpayer’s resident 1040 personal income tax return, driver’s license, and other official documents.

In most cases, the filing of a Rhode Island resident 1040 personal income tax return would provide the necessary documentation. However, some additional documentation may be requested.

The 183 days or more occupancy requirement does not need to be consecutive days.

No, the property would not be subject to tax if either the resident was authorized by the trust to reside at the property or there is official documentation to establish residency.

A primary residence is a residential property where a taxpayer lives for at least 183 days within the privilege year. Provided that the taxpayer is authorized to live at the property, in most cases, this primary residence would be used on a taxpayer’s income tax return, driver’s license, and other official documents.

Please reach out to the Division of Taxation at Tax.Property@tax.ri.gov with any questions.

The 183-day or more occupancy requirement is based on the privilege year. The tax for the first year is effective July 1, 2026, based on the privilege year of July 1, 2025 through June 30, 2026.

No. This does not meet the requirement for exemption. The property must be rented for 183 days or more during the privilege year to qualify for an exemption

Yes, the tax applies. Seasonal properties would need to be rented for 183 days or more, to be exempt from the tax.

No. The property is not subject to tax as long as one unit is owner occupied or qualifies for an exemption.

The Division of Taxation has published an extensive FAQ document that answers common general questions. If you have a question that is not covered in the FAQ as it is specific to your situation or property, contact the Division of Taxation by email at Tax.Property@tax.ri.gov.