H 7567Property

Taxation - Levy and Assessment of Local Taxes - Tax Deferral Program

Qualified seniors and disabled residents may defer paying property taxes on their homes until the property is sold or transferred.

Held for study

Population
Affected

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Introduced Feb 6, 2026Committee House Municipal Government & Housing

Plain-English Summary

This bill establishes a statewide property tax deferment program for Rhode Island residents who are at least 62 years old, totally disabled, or totally disabled veterans. Eligible homeowners can delay paying property taxes on their primary residence until they pass away, sell the home, or transfer the title. During the deferment, the unpaid taxes accrue 6% annual interest and become a lien on the property. Homes with reverse mortgages or less than 20% equity do not qualify. The state will appropriate $2 million annually starting in 2027 to fund these deferments.

For younger readers

This new rule helps older people (over 62) and people with severe disabilities who own their own homes. Sometimes, paying taxes on a house can be very expensive. This law lets these homeowners wait to pay those taxes until later, usually when they sell the house or pass away. While they wait, they have to pay a little bit of extra money called interest. This helps them stay in their homes without worrying about a big tax bill right now. The state government will set aside money to help towns manage this process.

Who & Where It Applies

Impacted groups

Senior citizens (62+)Disabled citizensDisabled veteransMunicipal Tax CollectorsHomeowners with single-family dwellings

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

$1.28

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Strengthens the social safety net by allowing vulnerable populations, such as low-income seniors and disabled individuals, to age in place without the fear of losing their homes due to tax burdens.
Provides state-level funding ($2 million) to support municipalities, ensuring that local public services are not negatively impacted by the delay in tax revenue collection.
Addresses economic inequality by offering financial flexibility to those on fixed incomes who may be "house rich" but "cash poor."
The 6% interest rate compounded on deferred taxes could significantly erode the generational wealth passed down to heirs, disproportionately affecting lower-income families.
Excludes homeowners with reverse mortgages or less than 20% equity, potentially leaving out the most financially precarious individuals who need help the most.
The $2 million annual cap may be insufficient to cover all eligible applicants, potentially creating a system where aid is rationed rather than guaranteed to all in need.

For Conservatives

Protects private property rights by preventing the government from seizing the homes of veterans and seniors simply because they have cash-flow issues.
Structured as a deferral with interest rather than a taxpayer-funded handout, ensuring that the individual eventually meets their financial obligation to the government.
Supports veterans who have been determined to be totally disabled, honoring their service and sacrifice by easing their financial burdens.
Creates a new ongoing state expenditure of $2 million annually starting in 2027, increasing the burden on state taxpayers to subsidize local tax collection issues.
Expands government bureaucracy by requiring the General Treasurer's office to manage and verify municipal claims and deferment procedures.
Interferes with local municipal control by mandating how towns must handle tax collections and liens for specific residents.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 33 additions

SECTION 1. Chapter 44-5 of the General Laws entitled "Levy and Assessment of Local Taxes" is hereby amended by adding thereto the following section: 44-5-20.13.2. Statewide deferment of payment of tax for qualified senior citizens, disabled citizens and disabled veterans.

(a) The payment of property taxes on a single-family dwelling, including manufactured homes, owned and occupied by a senior citizen, disabled citizen or disabled veteran may be deferred until the property is disposed by reason of death of all qualified owners, or by reason of transfer or conveyance; provided however, that any taxes so deferred shall constitute a lien against the real estate. Interest, in an amount of six percent (6%) annually, shall accrue during said deferral period and shall be added to the final tax bill. The city or town shall file a written notice of the lien in its land evidence records.

(b) For the purposes of this section the following definitions shall apply:

(1) “Senior citizen” means any resident who is sixty-two (62) years of age or older.

(2) “Disabled citizen” means a resident who has been determined to be totally disabled by the United States Social Security Administration.

(3) “Disabled veteran” means a resident who is a veteran, and has been determined to be totally disabled by the United States Veterans Administration. (c)(1) Single-family dwellings including manufactured homes, with reverse mortgages, shall not be eligible for the deferment of property taxes.

(2) Single-family dwellings including manufactured homes with less than twenty percent (20%) equity in the home shall not be eligible for this deferment of property taxes.

(d) The State of Rhode Island general treasurer's office shall have authority to establish the requirements, and application and/or verification procedures for municipalities to avail themselves of the benefit of the deferment provided in this section.

(e) If, following the granting of a deferral, a tax assessor determines that an owner who applied and was granted a deferral of property taxes did not file the claim in good faith, the owner shall be assessed a delinquency penalty for the nonpayment of the deferred taxes.

(f) The tax collector of each city or town shall certify to the director of finance on or before the end of business on January 31, the total amount of supplemental roll property tax deferral claims submitted pursuant to this section.

(g) This section does not apply to property taxes paid through escrow accounts.

(h) For the fiscal year 2027 and thereafter, the State of Rhode Island shall appropriate two million dollars ($2,000,000) for the purpose of funding the deferments provided in this section.

(i) The funds appropriated under this section shall be administered by the office of the general treasurer.

SECTION 2. This act shall take effect upon passage.