Rhode Island Homeowners Sued to Block Property Tax

Owners of high-value, non-primary residences are challenging a tax that took effect this summer.

Updated on Sept. 23, 2026 in Taxes

Bold flat-color editorial illustration showing a simplified geometric silhouette of a house, representing property tax policy. — Forty Rhode Island property owners have filed a lawsuit challenging a state-imposed tax on non-owner-occupied homes valued over $1 million. AI Illustration. Upload story photo >

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Forty Rhode Island property owners filed a lawsuit in Newport County Superior Court challenging a state tax on non-owner-occupied homes valued over $1 million. The tax, which aims to fund affordable housing credits, took effect for affected households on July 1, 2026.

Why it matters

The lawsuit centers on the constitutionality of a $5-per-$1,000 tax on assessed value exceeding $1 million for properties not used as a primary residence for at least 183 days. Homeowners are seeking to overturn the measure, arguing it is an unconstitutional infringement on their property rights.

The tax applies to home values exceeding $1 million at a rate of $5 per $1,000 of assessed value. While the state estimates the measure will generate $37 million for housing credits, the impact on specific household budgets depends on the valuation of non-primary properties.

The players

Newport County Superior Court

The judicial venue currently reviewing the property owners' challenge to the state's housing tax.

The details

The tax targets homes that are not owner-occupied for at least 183 days per year, with properties offering long-term or short-term rentals potentially exempt if they meet the occupancy threshold. Eligible taxpayers must pay the levy in quarterly installments based on the amount their home's assessed value exceeds the $1 million limit. The litigation, initiated by 40 property owners, challenges the core mechanism of this 2025 legislation.

The state legislature passed the tax law in 2025.
The tax officially took effect on July 1, 2026.
The lawsuit was filed in Newport County Superior Court on September 23, 2026.

Money Landscape

This litigation follows the enactment of the 2025 Rhode Island non-owner-occupied housing tax legislation aimed at leveraging property wealth for housing credits. The case tests the limits of state authority to impose supplemental taxes on high-value properties that are not primary residences.

Homeowners with properties valued over $1 million should review their primary residence status and ensure they meet the 183-day occupancy requirement to avoid the quarterly tax payments. If you own property in communities like Westerly, Charlestown, South Kingstown, or Newport, consult a tax professional regarding your specific exposure while the court case proceeds.

The takeaway

The ongoing court challenge highlights the financial stakes for owners of high-value, multi-state, or vacation properties in Rhode Island. Property owners should verify their assessed values and occupancy logs while monitoring the court’s docket for potential changes to their tax obligations.