Bill dubbed ‘Taylor Swift Tax’ set to hit Rhode Island

Taylor Swift’s luxury lifestyle is set to cost her more after a new state budget impacted her and her peers who call the Ocean State a second home.

(Video Credit: WJAR)

While the pop princess may have supported then-Vice President Kamala Harris in the 2024 election, the Democratic Party in Rhode Island had no qualms with imposing a new tax that realtors expect will rock the market. Part of the $14.3 billion budget that was opposed solely by the four Senate Republicans heading to Gov. Dan McKee’s (D) desk is adding a hefty burden for vacation homes earning it the moniker of the “Taylor Swift Tax.”

“This Taylor Swift Tax is not a ‘tax the rich’ tax even though it sounds like it,” expressed Rhode Island Association of Realtors President Chris Whitten to WJAR. “It’s a yearly tax on someone that owns a home whose assessed value is over a million dollars.”

Realtor.com detailed that, if signed into law by McKee, the every $500 over $1 million that a home is valued will face an additional $2.50 in tax. In the case of Swift’s luxury beachside Watch Hill estate, that amounted to $136,000 per year.

The site further explained, “To avoid the tax, owners have two choices. They can either spend at least 183 days a year living there (the legal threshold for primary residence) or rent the place out for most of the year, so it doesn’t just sit empty through the off-season.”

The tax was expected to impact a considerable swath of homeowners in Rhode Island as the number of homes valued over $1 million amounted to roughly 22% in the state.

Of course, renting out a property wasn’t a win-win for property owners as Rhode Island PBS highlighted that the budget also applied the state’s 5% hotel tax to short-term rentals with an aim toward covering services for the homeless and promoting tourism.

“Please don’t take from our housing market at the moment to balance the budget for other items, it’s going to be detrimental,” added Whitten as the tax would also impact inherited properties.

The so-called “Taylor Swift Tax” wasn’t the only money grab from state legislators as the budget for Fiscal Year 2026 also included a 63% conveyance tax on sellers.

“For years it’s been $4.60 per thousand. It’s about $2,400 you’d pay in taxes,” Whitten said of a $500,000 home. “It’s going to bo $1,500 more on that example.”

Addressing the opposition to the tax, Speaker of the House Joe Shekarchi (D) told WJAR, “In order to address Rhode Island’s crisis in health care, we needed to make tough decisions and find additional revenues in the budget to invest in primary care and Medicaid. I felt it was more equitable to increase the costs on second homes worth over a million dollars than increasing the tax burden on working Rhode Island families.”