Taylor Swift’s $17 million Rhode Island mansion could face a $136,000 annual tax bill under a proposed state levy dubbed the “Taylor Swift Tax,” targeting wealthy owners of vacant vacation homes. But will it ease the state’s housing crisis or drive away investment?
Rhode Island’s “non-owner-occupied tax” aims to fund affordable housing by taxing second homes worth over $1 million left vacant for at least 183 days a year, part of the state’s 2026 budget set to take effect in July 2026. The tax, at $2.50 per $500 of value above $1 million, also includes a 63% conveyance tax hike for home sellers, affecting owners like Swift, Jay Leno, and Conan O’Brien.
The tax, inspired by Swift’s Watch Hill estate, reflects broader “soak the rich” policies like Vancouver’s Empty Homes Tax and Los Angeles’s Measure ULA. It aims to address Rhode Island’s housing shortage, with median home prices at $500,000 in 2025, up 40% since 2020, and a deficit of 20,000 affordable units.
State Sen. Meghan Kallman said the tax corrects an “upside-down” system where low-income residents pay a higher share of their income in taxes. But the Rhode Island Association of Realtors, led by Chris Whitten, warned it could deter buyers, depress property values, and burden middle-class families with inherited $1 million homes.
Barstool Sports founder Dave Portnoy criticized the tax on X, warning other states might follow suit. “This could spread like wildfire,” he posted.
Critics point to economic risks. Local realtor Larry Burns said wealthy owners might sell or avoid Rhode Island, hurting tourism-driven businesses. Higher taxes could raise rents, impacting low-income tenants, and fewer sales could tighten housing supply, per the Realtors Association.
In Los Angeles, Measure ULA’s mansion tax slowed commercial real estate development, per UCLA studies, a cautionary tale for Rhode Island. Wealthy owners are already exploring loopholes, like hiring house sitters or renting out the property more than half the year, to dodge the vacancy rule.
Wealth taxes in general have a history of bad results. France’s wealth tax (1990–2018) saw 60,000 millionaires emigrate, costing GDP, while Vancouver’s tax increased rentals but didn’t solve affordability.
Low-income renters hope for relief but fear rent hikes. A similar 2015 proposal failed after realtor pushback, and today’s critics warn of a market freeze. Democrats call the tax equitable; Republicans label it an economic misstep.
The Rhode Island House approved the tax 66-9 on June 18, but Senate approval and the governor’s signature are pending. The outcome could influence other states grappling with housing crises and wealth inequality. Rhode Island’s experiment will test whether taxing the rich helps the poor or shifts the burden back onto them.