Law firm Hinckley Allen has filed litigation on behalf of more than 40 Rhode Island homeowners challenging the constitutionality of the state’s new tax on high-value second homes.
The lawsuit, filed in Newport Superior Court, challenges a law that took effect July 1, imposing an additional $5 tax for every $1,000 of assessed value on second homes valued above $1 million.
The measure has been widely referred to as the “Taylor Swift Tax,” a reference to the singer’s part-time Rhode Island residence.
Homeowners argue that the tax violates both federal and state constitutional protections by selectively targeting second-home owners, particularly out-of-state residents who cannot vote in Rhode Island.
According to the filing, “there is no reasonable basis or justification for the state to single out these homeowners among all Rhode Island property owners for this additional tax burden.”
The tax is charged at a rate of $2.50 for every $500 of assessed value above $1 million, in addition to existing property taxes.
‘Selective tax’ dispute
Supporters of the measure have argued that owners of high-value second homes place additional demands on municipal services, fail to maintain their properties, negatively affect neighborhood values and should be encouraged to make more housing available for renters.
The plaintiffs dispute these assertions, arguing that second-home owners often consume fewer municipal services, maintain their properties, and contribute positively to local property values and communities.
“When the tax was passed, it troubled many of the owners targeted by this selective tax,” said Jerry Petros, chair of Hinckley Allen’s litigation group and the partner leading the case. “These homeowners already pay high property taxes and pay for more than their fair share of our municipal services, and they do so without complaint.”
Paul Grimaldi, a spokesperson for the Rhode Island Division of Taxation, said that as of May, the state had identified 22,431 residential properties with assessed values exceeding $1 million. Of these, 8,245 were classified as non-owner-occupied and may be subject to the new tax, according to local outlet WPRI.
Petros said the tax could also discourage investment and lead some property owners and business operators to seek opportunities elsewhere.
The complaint further points to statements attributed to the legislation’s sponsor, acknowledging the measure affects out-of-state residents who cannot participate in Rhode Island elections. In response, homeowners argue that the law conflicts with the principle of “no taxation without representation.”
“The Selective Property Tax extracts money from owners of second homes, some of whom are not wealthy but are sharing generational family homes near the coast, and gives that money in the form of tax credits to low-income housing developers,” the filing stated. “Typically, these tax credits are bundled into funds that are offered to private investors.
“In other words, the State has decided to extract money from a group of people who have made a substantial investment in the State through their purchase of property, and transfer it to another group of people who may have no
connection whatsoever to Rhode Island — private real estate developers seeking profits.”
Hinckley Allen said it will seek to have the tax declared unconstitutional as the case moves forward.
Earlier this month, a New York appeals judge lifted a temporary pause that had blocked enforcement steps tied to a proposed New York City pied-à-terre tax residency proof process. The tax — enacted as part of New York’s 2026 state budget — places an annual surcharge on luxury residential properties that do not serve as the owner’s primary residence.
That case returns to Staten Island court on Aug. 31.
