S 2259Property

Taxation - Levy and Assessment of Local Taxes

This bill allows towns to give homeowners a tax break by lowering their property's assessed value by up to 20%.

Introduced

Population
Affected

Introduced Jan 23, 2026Committee Senate Housing & Municipal Government

Plain-English Summary

This bill grants authority to all municipalities in Rhode Island to establish a "homestead exemption" program for residential property owners. If a town adopts this ordinance, it can reduce the assessed value of a resident's home by up to 20% for tax purposes. This applies to properties with fewer than four units that are used exclusively for residential purposes. The bill allows towns to create their own rules for eligibility and protects existing homestead exemptions in towns that may already offer higher rates.

For younger readers

This bill helps people who own the homes they live in. It gives every city and town the power to give these homeowners a discount on their property taxes. If a town chooses to use this rule, they can lower the value of the house for tax purposes, which means the owner pays less money. This applies to houses where people live, not big businesses. It is up to each town to decide exactly how to set up the rules for this discount.

Who & Where It Applies

Impacted groups

HomeownersMunicipal GovernmentsResidential Property OwnersCommercial Property OwnersTax Assessors

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

None

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Reduces the financial burden on working-class homeowners, helping to prevent displacement caused by rising property taxes and gentrification.
Encourages owner-occupancy over absentee landlordism, which fosters stronger community ties and neighborhood stability.
Empowers local governments to tailor tax relief specifically to the needs of their residential communities, promoting a more responsive local democracy.
Fails to provide relief to renters, who are often the most financially vulnerable, potentially widening the wealth gap between property owners and tenants.
Reduces the available tax base for funding essential public services like schools and social programs, which disproportionately impacts low-income residents.
May exacerbate inequality between towns, as wealthier municipalities can afford to offer tax breaks while poorer communities cannot afford to lose the revenue.

For Conservatives

Lowers the tax burden on property owners, allowing families to keep more of their income and reducing government confiscation of wealth.
Supports the principle of local control by allowing municipalities to determine their own tax structures rather than imposing a one-size-fits-all state mandate.
Incentivizes and rewards homeownership, which is a key component of personal responsibility and financial independence.
Likely shifts the tax burden onto businesses and commercial properties to make up for lost revenue, which could stifle economic growth and job creation.
Creates a disjointed tax system across the state with varying rules in each town, increasing complexity and bureaucratic red tape.
Allows the government to pick winners and losers by granting special tax privileges to specific classes of property owners while excluding others.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 18 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: 44-5-91. Homestead exemption.

(a) Notwithstanding any other provision in this chapter to the contrary, any municipality, by ordinance, duly enacted, is authorized to annually fix the amount, if any, of a homestead exemption with respect to assessed value from local taxation on taxable real property used for residential purposes and to grant homestead exemptions to the owner or owners of residential real estate in an amount not to exceed twenty percent (20%) of the assessed value. The exemption only applies to property used exclusively for residential purposes, and improved with a dwelling containing less than four (4) units. In order to determine compliance with the homestead exemption as outlined in this section, the municipality shall provide, by ordinance, rules and regulations governing eligibility for the exemption established by this section.

(b) In the event property granted an exemption under this section is sold or transferred during the year for which the exemption is claimed, the municipality, upon approval of its city or town council, may provide for a proration of the homestead exemption in cases where title to property passes from those not entitled to claim an exemption to those who are entitled to claim an exemption.

(c) Notwithstanding the provisions of subsection (a) of this section, any municipality that, prior to the enactment of this section, has granted its residents a homestead exemption at a different or higher rate, shall be exempt from the limitations imposed in that subsection.

SECTION 2. This act shall take effect upon passage.