Rhode Island is implementing major conveyance tax increases
Effective October 1, 2025, this increase will significantly impact all real estate transactions in the state. The changes introduce a progressive two-tier system that particularly affects luxury residential properties, with timing based on closing dates rather than contract signing dates. ( cont. below ).
Key Points:
• 63% Base Rate Increase: Conveyance tax rises from $2.30 to $3.75 per $500 for all properties, affecting every transaction
• Two-Tier System for Luxury Homes: Residential properties over $800,000 face an additional $7.50 per $500 on the excess amount (total rate of $11.25 per $500 above threshold)
• Timing is Critical: New rates apply to closings on/after October 1, 2025, regardless of when contracts were signed
• Dramatic Cost Increases: A $1.2M home sees conveyance tax jump from $5,520 to $15,000 (172% increase)
• Seller Responsibility: Sellers pay conveyance tax unless otherwise negotiated in purchase agreements
• Indexed Threshold: The $800,000 threshold will adjust annually for inflation starting January 1, 2026
• Additional Tax Coming: New tax on non-owner occupied properties over $1M assessed value begins July 1, 2026
• Strategic Planning Needed: Buyers and sellers should consider timing strategies and may want to expedite closings before October 1, 2025
Feel free to send me a message if this brings up any questions. Always speak with your accountant, financial advisor, and/or attorney to understand how this factors in on your home sale.
