Melanie Delman of Lila Delman Real Estate International says "We have spent over 50 years encouraging visitors from near and far to come to Rhode Island. Competing against many resort locations, Rhode Island is second to none. Once these visitors spend an afternoon with the salty breeze in their face, they fall in love with the Ocean State.
On March 12, 2015, Rhode Island Governor Gina Raimondo proposed new efforts to help revive our economy. According to the proposal, Raimondo plans to aid the economy by mandating new statewide property tax on non-owner occupied residences and vacant land valued at $1 million plus. The proposal also plans to add a special tax on rental homes and cottages. While we are in support of the governor’s goal, using this vehicle to stimulate the economy will negatively affect our community.
It's difficult to understand the logic in imposing new state level taxes on property owners just as the economically important housing sector begins to recover. Being an important second home and tourist destination is significant to RI's economy and we continually work to position ourselves against the more recognized Hamptons, Cape Cod, Nantucket and Martha’s Vineyard. The measures to increase taxes on second homes and rentals certainly would do harm to furthering that effort.
As a small state, Rhode Island effectively functions as a community, and history has shown that changing real estate taxes diminishes community gain. Many years ago, administrators took away the Rhode Island Historic Preservation Tax Credit and those who supported the developments, the suppliers and builders, were left jobless. By adding taxes targeted at the real estate industry, the economy will suffer when second-home and rental owners are no longer here to invest in our beloved communities.
The administration expects the new tax to raise $11.8 million but we feel that revenue generated will be dwarfed by the money lost when visitors stop enjoying RI’s physical, cultural and historic amenities. Rhode Island is home to fishermen, painters, builders, teachers, and dreamers that work to catch the most delightful cod, freshen and renew our architecture, inspire young minds, and create an all-around better community. We fear that limiting those who invest in and partake of Rhode Island's diverse offerings on a part time basis will adversely affect the working class that make us tick.
All signs point to an improved market in 2015 and we would hate to see the momentum gained in the housing market diminished by this tax. The added taxation will completely deter second home and rental buyers from choosing Rhode Island."