Raimondo tax targets wealthy

It’s nicknamed the “Taylor Swift tax,” but Gov. Gina M. Raimondo’s proposed tax on pricey second homes is a variation of similar fees in other states.

“It is common for states to tax owner-occupied properties differently than nonowner occupied properties – which is what this assessment does,” Raimondo spokeswoman Marie Aberger said, of the tax on second homes, investment properties and other nonowner-occupied property valued at more than $1 million. She cited Florida, Maine, New Hampshire, New Jersey and Vermont as examples.

But two neighboring states, Massachusetts and Connecticut, don’t have a similar tax – and that doesn’t sit well with local Realtors.

“Hands off the real estate recovery in Rhode Island,” said Bruce Lane, president of the Rhode Island Association of Realtors.

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Lane and past RIAR President Stephen Antoni, a Realtor with the Newport office of Lila Delman Real Estate International, believe Raimondo’s proposed tax is inherently unfair, doesn’t raise much money and will drive wealthy property owners out of Rhode Island.

“Are we going to give [these property owners] another reason to migrate to a different state?” Antoni asked.

A total of 2,359 properties valued at a combined $4.7 billion would face the assessment, according to the R.I. Department of Revenue. The town taking the biggest hit is Westerly, with 568 potentially affected properties. Grammy-winning pop star Taylor Swift bought her mansion in the town’s Watch Hill section in April 2013. As of March 2015, it was assessed at $12,429,400, said Westerly Town Assessor David Thompson.

The tax rate would be $2.50 for each $1,000 of assessed value at properties valued at $1 million or more, the budget proposal states.

Raimondo is trying to address a budget deficit of approximately $190 million in fiscal 2016 and a projected $255.5 million in fiscal 2017. This tax proposal is projected to raise just under $11.8 million for the coming fiscal year and slightly more, $12.2 million, the following year, Aberger said.

Vermont has a similar statewide tax used to help fund education, says Vermont Tax Commissioner Mary Peterson.

Controversy in Vermont over its law, which has been on the books for more than 15 years, has died down but not disappeared, said Peterson.

“In the past, people thought we were picking on out-of-staters,” she said.

Raimondo says everyone, including the wealthy, must contribute toward eliminating projected budget deficits.

“A few thousand dollars will not make or break the purchase of a million-dollar second home,” Aberger said.

As for what Swift and other wealthy property owners think, time will tell.

Thompson isn’t even sure there would be an impact on Swift’s property.

“I don’t know if she claims this property as her primary home,” Thompson said. “I’m not sure how we prove who lives here and who doesn’t.” •

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