Swifties, sun-seekers, and second-home millionaires — brace yourselves.
Rhode Island just approved a controversial new real estate tax that’s got wealthy seasonal residents fuming and threatening to pack up their beach chairs for good.
Locals are calling it the ‘Taylor Swift tax,’ and yes — it could even hit the pop star’s Watch Hill mansion.
The proposed tax — which would impose fees that could soar into the six-figures for many — would apply to second homes worth $1million or more that aren’t used for at least six months a year.
Even Barstool Sports founder Dave Portnoy — a self-proclaimed Swiftie — joined the chorus of opposition, warning it could set off a dangerous trend among other Northeastern states.
‘We don’t like that tax,’ Portnoy said. ‘Now, I don’t have any houses in Rhode Island, but I got some pretty close. I don’t like those states getting the ideas.’
Lawmakers say it’s aimed at generating new revenue from properties often vacant for most of the year. Other famous celebrities who have real estate in Rhode Island and would get hit by the tax include Jay Leno, Conan O’Brien and Judge Judy Sheindlin.
But critics argue it unfairly targets families and individuals who have spent decades summering in Rhode Island — and contribute to the economy without draining local resources.
Local realtor and lifelong Watch Hill resident Geb Masterson said Rhode Island residents are so angry they’re threatening to go elsewhere if the bill becomes law.
‘These are people who put very little drain on Westerly and Watch Hill,’ Masterson told DailyMail of two communities that will be hit hardest.
‘It’s just another way to go after the wealthy when the state’s funds run dry… It’s another nail in the coffin.’
According to Zillow estimate, the star could make a nice profit on the expansive property after she purchased it in 2013 for a cool $17.75 million
The proposed tax would impose fees that could soar into the six-figures for many residents
She was just 23 years old when set her sights on the estate which used to belong to one of the richest women in the US
The Rhode Island House of Representatives recently greenlit the proposed $13.9 billion state budget that includes the sweeping new real estate tax, which Masterson says residents are furious over.
On Wednesday, Rhode Island Gov. Daniel J. McKee put the bill in limbo temporarily, saying he will not sign nor veto the $14.3 billion state budget as it stands because ‘it taxes people and raises fees unnecessarily.’
‘At this moment in time there wasn’t a need to raise taxes on anyone,’ he said, not fully ruling out future taxes on part-time residents.
Gov. McKee’s move isn’t the same as a veto and the bill can move forward if revised to his liking.
If the budget had been vetoed, the General Assembly would have to go back into session to override the veto, or make amendments to the budget.
‘This won’t affect just the wealthy, everyone will be affected by this,’ Masterson, the Watch Hill resident, said of the potential new tax.
‘It’s a lot of old families here and for years it was a sort of a quiet sleepy town, most people have been coming here for generations with their parents.
‘It’ sort of changed a little a little bit, new blood has been coming into the area, the Swifties, which is actually fantastic for our summer tourism industry, because they come to see Taylor’s house then they stay the weekend.’
Families who would get hit have had Rhode Island beach homes for decades
This lavish vacation home, which became a celeb hotspot after hosting Taylor’s legendary Independence Day parties with her A-list friends, is located a high-end neighborhood
Barstool Sports founder Dave Portnoy does not like the proposed tax
Jay Leno and Mavis Leno have a home in Rhode Island where they do not live full time
Watch Hill realtor Larry Burns warns there could be economic backlash if owners are taxed
Masterson says tourism industry workers will feel the burn if homeowners start to flee the area because of the big tax.
‘There’s not a lot of winter industry around here so when the summer crowd comes in it’s supporting a lot of a lot of people,’ he says.
‘This will hurt them too if no one is here.’
If a law does pass in the future, Swift will face her own six-figure tax on her $17 million Watch Hill estate.
Swift has famously owned the mansion in the upmarket beach town since 2013 and spends July 4th there nearly every year.
Under the guise of helping Rhode Island’s affordability crisis, those who have ‘non-primary residences valued over $1 million’ will be taxed under the proposal.
Overall, homeowners would face an annual surcharge of $2.50 per $500 of assessed value above the first $1 million — meaning a $3 million second home would see a $10,000 yearly fee.
Taylor pictured with Selena Gomez and the Haim sisters at a previous 4th July party in Rhode Island
Westerly Rhode Island residents are angry a tax would be out of reach for many
Rhode Island Gov. Daniel J. McKee put the bill in limbo temporarily but it could pass one day
Kerry Park, a senior vice president Rhode Island Association of Realtors
Swift and her beachfront estate neighbors would likely get taxed $100,000 and up based on the size of their mansions.
The budget also proposes a 63 percent hike in the real estate conveyance tax, which sellers pay upon transferring property.
The state says revenue from both tax hikes would go toward affordable housing projects, including the construction of low-income units and expansion of housing tax credits.
Kerry Park, a senior vice president Rhode Island Association of Realtors, tells DailyMail that many people who have median priced second homes are going to get hit hard.
‘We do have a lot of smaller homes that are near the ocean. Since the pandemic those little tiny places are a lot of money now and if they’ve been in the family for generations now they’re going to have to come up with this annual tax which isn’t easy for a lot of those people,’ she said.
Watch Hill realtor Larry Burns warns the economic backlash of the tax will be brutal.
Burns specializes in coastal and luxury properties, and says the impact of the tax will trickle down to longtime residents who are not wealthy, and to local economies.
‘Rhode Island economy for the most part is driven by tourism, especially in all in New England especially coastal state like Rhode Island,’ he told the Daily Mail.
Swift and her beachfront estate neighbors would likely get taxed $100,000 and up based on the size of their mansions
Judge Judy Sheindlin owns a home in Rhode Island and would get hit with a huge tax bill
The local ice cream shop St. Clair Annex in downtown Watch Hill has been in the same family for four generations
St. Clair Annex owner James Nicholas says the tax will be bad for everyone in the state
The beaches in Watch Hill are popular among residents who summer in the town
Read More
'Dilapidated' beach town roars to life as a new American hotspot after finally catching a wave
‘And it’s really going to discourage people from buying second homes here because of the added expense.’
He continued: ‘There’s people like Taylor Swift — people will look at her and think, ‘Well, she has so much money she’ll never even notice an increase like this.’
‘But it’s not like the residents here have inexhaustible resources.
‘$100,000 here might be college education for the year for a kid, or two kids.’
Burns added the tax could force many to part with cherished family homes.
‘There’s a lot of older folks or multigenerational properties where the siblings have inherited the property, and if you keep adding expenses people end up selling because they can’t keep up with the cost,’ he said.
Local business owner James Nicholas, who is the fourth generation of his family to run St. Clair Annex, an ice cream shop down the hill from Swift’s estate (yes, she’s been in the shop and is lovely), put it best.
‘As one of the people who run small businesses that benefit from from summer residents, I’m thinking of others like landscapers, lumber yards, contractors, pool companies who are are relying on these summer visitors,’ he said.
‘It’s not the golden bullet that the people think it is that we’re just gonna text rich people and nothing’s gonna happen. There’s downstream consequences.
‘There’s a stratum of society that can absorb that cost, but regular people, maybe they don’t put an addition on the house, don’t you know go to the local restaurants or they don’t shop at the local shops as much, taxing them is short sighted thinking.’
Whether the tax becomes law down the line remains uncertain, but Burns, the local realtor, says it could go either way.
‘I don’t know if they’re posturing for political reasons, but this is really killing the goose that lays the golden egg,’ he said.