AN ACT RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES .

New homes face temporary tax-cap exception

For tax assessments dated December 31, 2025, or later, Rhode Island municipalities can collect taxes above their levy cap on qualifying new homes. This limits total local tax collections, not each homeowner’s bill. The municipality must issue more than 10 occupancy certificates for new housing in the fiscal year it seeks the exception. At least 10% of the project’s homes must be designated as low- or moderate-income housing. Eligible homes include new construction, modular homes, manufactured homes, and conversions of existing buildings into housing. Conversions must meet zoning and building codes and increase the local housing stock. Homes must use the same tax rates and valuation methods as similar local homes. The exception lasts for the certificate’s fiscal year and the next two fiscal years. Full taxes must count toward the cap by the fourth fiscal year after issuance. Approval requires a four-fifths governing-body vote, or a majority of electors present and voting at a financial town meeting.