Rhode Island officials are introducing new budget proposals, one of which is informally referred to as the “Taylor Swift Tax” affecting seasonal homes.
The Rhode Island Association of Realtors has expressed worries regarding these proposed changes, suggesting they’re increasing overall costs by a substantial 63%.
Chris Witten, the association’s president, shared concerns in a conversation with NBC 10 News, stating, “Please don’t take it from the housing market at this time to balance the budget for other items. That will be harmful.”
“Taylor Swift Tax” targets second homes valued over $1 million
This budget initiative particularly impacts luxury vacation homes, introducing a new fee for second residences priced over $1 million. Should this be enacted, an extra charge will apply to homes that remain unoccupied—non-primary residences—for over six months.
The proposed annual fee stands at $2.50 for every $500 of value exceeding $1 million. For instance, an empty home valued at $2.5 million could incur an additional tax of $7,500 each year if it’s been vacant for over six months.
Referring to Swift’s estate in Watch Hill, she could face annual charges amounting to $136,000 in taxes.
Swift acquired this property, which features seven bedrooms and nine bathrooms, for $17.75 million back in 2013. It’s a known venue for her celebrity gatherings, including a notable July 4th celebration.
The Westerly Mansion, termed The Home and built in 1904, even inspired one of Swift’s songs from her 2020 album “folklore,” titled “The Last Great American Dynasty.”
Additional proposals could affect the fees sellers owe at closing time, with carrying taxes set to rise from $2.30 to $3.75 for every $500, marking a significant increase of 63%.
As per Zillow, the average home price in Rhode Island hovers around $492,939. Thus, the new tax rate would impose taxes ranging from $2,200 to $3,700.
