Proposed House Budget includes a 63% increase in the residential property conveyance tax
FOR IMMEDIATE RELEASE
WARWICK, R.I. – June 13, 2025 — Rhode Island lawmakers are weighing a proposal that could significantly raise the cost of selling high-end homes as part of a broader strategy to tackle the state’s housing crisis. Governor Dan McKee’s latest budget plan includes a 63% increase in the Rhode Island Transfer Tax on home sales exceeding $800,000 — a move aimed at boosting funding for homelessness prevention and affordable housing initiatives.
Currently, RI property tax imposes a real estate conveyance tax of $2.30 per $500 of a property’s sale price. For properties sold above $800,000, an additional $2.30 per $500 is already tacked on. Under the governor’s proposal, an extra $1.65 per $500 would be added to those higher-end transactions, raising the total surtax to $3.95 per $500 above the $800,000 threshold.
What It Means for Sellers
For a $1.3 million home sale, the proposed change could result in an additional $1,650 in taxes — money that would go directly into the state’s housing fund.
According to Robert Scaralia of the Real Estate Institute of Rhode Island supporters of the measure argue that it’s a necessary step toward solving Rhode Island’s growing housing affordability problem, especially in wealthier communities where resistance to low-income development has often stalled progress.
“This proposal ensures that higher-value home sales contribute meaningfully to a statewide solution,” said a housing advocate. “It’s not just about raising revenue — it’s about equity.”
Municipal Pushback
Not all municipalities are on board. Newport, for example, has voiced concerns over the tax hike, worried that it could deter high-end real estate activity in the city. However, the governor’s plan is designed to override local control, mandating the increase statewide regardless of local sentiment.
Meanwhile, other legislative efforts that could have allowed cities and towns to set their own conveyance tax rates have stalled. Bill H5756, introduced earlier this year to permit municipal flexibility for properties sold above $900,000, was held for further study — as was Bill H6257, related to the governor’s proposed surtax, during a House Finance Committee meeting on May 13.
Looking Ahead
The debate reflects broader tensions between economic development and social responsibility. As lawmakers revisit the proposal in upcoming sessions, advocates and opponents alike will be watching closely to see if Rhode Island is ready to reshape how it funds its response to homelessness and housing insecurity.
Media Contact:
Real Estate Institute of Rhode Island
News Department
401-943-8500
info@instituteRI.com
Rhode Island Transfer Tax Increase