S 2698Property

Taxation - Non-Owner Occupied Property Tax Act

Exempts unheated, seasonal summer homes from the non-owner occupied property tax during winter months.

Held for study

Population
Affected

Introduced Feb 27, 2026Committee Senate Housing & Municipal Government

Plain-English Summary

This legislation amends the "Non-Owner Occupied Property Tax Act" to create a specific tax exemption for certain seasonal properties. It defines "seasonably-habitable non-owner occupied residences" as properties that are not primary residences, are occupied seasonally, have no heating system, and have exposed water pipes that must be drained in winter. The bill exempts these specific unheated properties from the non-owner occupied tax between October 15 and May 15 of each year, recognizing that they cannot be inhabited during the colder months.

For younger readers

Some people own summer houses that they do not live in all year. This bill changes the tax rules for a specific kind of summer cottage. It talks about cottages that do not have heaters and have water pipes that need to be emptied so they do not freeze in the winter. Because nobody can live in these cold houses during the winter, the bill says the owners do not have to pay a specific extra tax on them from the middle of October until the middle of May.

Who & Where It Applies

Impacted groups

Seasonal Property OwnersOwners of Unheated ResidencesMunicipal Tax AssessorsReal Estate InvestorsWealthy Homeowners

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

None

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Promotes tax fairness by ensuring individuals are not penalized for "vacancy" during months when a property is physically uninhabitable due to a lack of heating infrastructure.
May incentivize the preservation of traditional, rustic summer camps and cottages rather than encouraging owners to renovate them into energy-consuming, year-round luxury estates.
Prevents the taxation system from disproportionately affecting owners of older, simpler properties compared to those who own modern, fully conditioned investment properties.
Reduces potential tax revenue from owners of properties assessed at over one million dollars, effectively providing a tax break to the wealthy.
Prioritizes the financial interests of second-home owners over the need to maximize revenue for public services and community welfare programs.
Could create a loophole that encourages property owners to remove heating elements or maintain substandard housing conditions to avoid taxation.

For Conservatives

Protects property owners from being taxed on the use of their property during periods when it is physically impossible to occupy it, upholding principles of fair taxation.
Reduces the overall tax burden on property owners, allowing them to retain more of their income and assets.
Prevents government overreach by refining a broad tax law to account for the practical realities of seasonal property ownership.
Complicates the tax code with specific "carve-outs" and definitions rather than repealing the underlying non-owner occupied tax entirely.
Requires government tax assessors to intrude into private properties to verify specific details like exposed pipes and lack of heating systems.
Maintains the premise that the government has the right to levy specific taxes based on how often a private owner occupies their own property.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 11 additions · 1 deletion

SECTION 1. Sections 44-72-3 and 44-72-5 of the General Laws in Chapter 44-72 entitled "Non-Owner Occupied Property Tax Act" are hereby amended to read as follows: 44-72-3. Definitions. The following words and phrases as used in this chapter have the following meanings:

(1) “Administrator” means the tax administrator within the department of revenue.

(2) “Assessed value” means the assessed value of the real estate as of December 31 of the corresponding taxable year in accordance with § 44-5-12.

(3) “Non-owner occupied” means that the residential property does not serve as the owner’s primary residence and is not occupied by the owner of the property for a majority of days during a given taxable year.

(4) “Non-owner occupied tax” means the assessment imposed upon the non-owner occupied residential property assessed at one million dollars ($1,000,000) or more pursuant to this chapter and as adjusted pursuant to § 44-72-6.

(5) “Person” means any individual, corporation, company, association, partnership, joint stock association, and the legal successor thereof or any other entity or group organization against which a tax may be assessed.

(6) "Seasonably-habitable non-owner occupied residences" means that the residential property does not serve as the owner’s primary residence and is not occupied by the owner or a tenant of the property for a majority of days during a given taxable year, and are only seasonally occupied. These residences shall have exposed water pipes that are required to be drained during the winter months and shall not be equipped with a means of providing heat to the residence. ~~(6)~~(7) “Taxable year” means July 1 through June 30. 44-72-5. Exemptions.

(a) This chapter does not supersede any applicable exemption in the general or public laws. In no case shall this chapter apply to, or any tax therefrom be assessed against, any properties or buildings that are rented or were rented for a period of more than one hundred eighty-three (183) days during the prior taxable year and subject to the provisions of chapter 18 of title 34 or any properties or buildings that are rented or were rented and are subject to tax pursuant to chapter 18 of this title.

(b) This chapter shall not apply to seasonably-habitable non-owner occupied residences between the dates of October 15, and May 15 of each taxable year.

SECTION 2. This act shall take effect upon passage.