Rhode Island Property Tax Update
Higher Tax Increases in FY 2026
Burdens Continue to Shift to Businesses and Renters
In FY 2026, about one in five municipalities exceeded the state-mandated 4.0 percent levy cap, and
overall property tax increases were higher than at any point in the last decade. As these increases
take hold, landlords, renters, and businesses bear a disproportionate share of the burden, as cities
and towns continue to shift taxes away from resident homeowners. This trend negatively affects
both housing affordability and economic development.
Key Takeaways
- Rhode Island property taxes are among the highest in the nation, ranking 10th highest per capita and exceeding the U.S. per capita total by 22% in FY 2023.
- After a period of relatively modest growth, property tax increases accelerated in FY 2026. The
statewide levy grew by $98.3 million (3.7%), the largest increase of the past decade, above
projected inflation (2.8%), and 1.6 times the average annual increase of the prior nine years.
- Seven municipalities exceeded Rhode Island’s 4.0% levy cap in FY 2026, the highest number
in the last decade and well above the prior nine-year average of 2.2 communities
- Property values surged statewide by 42% ($61.47 billion) between FY 2023 and FY 2026, 2.5
times the growth rate of the preceding three-year period (FY 2020 – FY 2023).
- Residential property values drove this growth, increasing by $55.16 billion (47%) between
FY 2023 and FY 2026, and more than doubling since FY 2017.
- In FY 2026, the statewide effective commercial tax rate was 1.8 times higher than the
residential rate and the tangible rate was 3.3 times higher; both differentials widened yearover-year and have grown substantially since FY 2022.
- Twenty-one municipalities tax larger apartment buildings at higher rates, while 12 use homestead exemptions that shift property taxes onto landlords and, indirectly, renters. Eight of the ten municipalities with the highest shares of full-time renters have homestead exemptions.
- Providence’s property tax disparities are particularly large both statewide and nationally.
In FY 2026, commercial property was taxed at 3.5 times the single-unit owner-occupied residential rate, creating a $20,800 tax bill differential on a property valued at $1.0 million.
- A new state-administered tax on higher-value non-owner-occupied homes will take effect in
FY 2027, affecting an estimated 9,000–10,000 properties and generating approximately $25.0
million in revenue annually.
