Monica Staaf is longtime general counsel for the Rhode Island Association of Realtors, where she’s responsible for answering legal questions and staffing the organization’s legal hotline.
Staaf writes advice for members, teaches continuing education classes for the association and produces legal update videos on YouTube. On top of that, she works with teams of volunteers to develop risk management tools and to create and update the content of the organization’s forms, along with forms used for the Rhode Island Statewide Multiple Listing Service.
PBN: New real estate taxes on short-term rentals took effect on Jan. 1. What are the most important details homeowners, buyers and sellers need to understand about this change?
STAAF: First, a 5% tax will apply to short-term, whole-home or condominium rentals of 30 days or less, that are listed on a hosting platform like Airbnb or VRBO or a real estate broker’s website.
Second, the local hotel tax on all short-term rentals will increase from 1% to 2%. The tax applies to both whole-home and partial-home/room rentals. The landlord is responsible for collecting these taxes from their tenants beginning the first of the year. A property manager can assist the landlord with this process.
A number of short-term rentals for 2026 have already been booked. As a result, property managers and landlords have had to notify those tenants that they will now incur additional taxes.
PBN: How do you anticipate this new tax will influence market behavior in Rhode Island, particularly regarding pricing, inventory decisions, or investor activity?
STAAF: Taxes like these can place an extra administrative burden on small Rhode Island landlords who may rent a family-owned property for a few weeks each summer. And, since more taxes are obviously not a welcome thing for tourists, it could keep not only tourists away, but investors as well.
A shrinking tourism base – and the extra collection and remittance burdens placed on landlords – could dampen investors’ desire to purchase homes for Airbnb-type rentals and cause landlords to put their properties on the market. Unfortunately, disincentives to invest in Rhode Island are not the best avenue for easing our housing shortage.
PBN: Are there any other new laws or regulations that will affect short-term rentals next year?
STAAF: A new law to help prevent human trafficking requires operators of hotels or short-term rentals to complete human trafficking prevention training that is approved and/or offered by the Rhode Island Department of Business Regulation.
The training must be completed before the first listing of a short-term rental property on a hosting platform like VRBO or a brokerage website, and by the end of every calendar year after that. Landlords must also adopt policies to report suspected human trafficking to the National Human Trafficking Hotline or to a local law enforcement agency.
PBN: With Rhode Island’s ongoing challenges around affordability and limited inventory, what role do tax policy and legislative action play in shaping possible solutions?
STAAF: According to an analysis by the National Association of Realtors, the real estate industry accounted for $14.9 billion, or 18.8%, of our state gross [domestic] product last year.
Since housing is a huge economic driver, it’s critically important that the tax policies and legislation enacted by the General Assembly enhance our residents’ access to affordable homes and ultimately, the opportunity to build generational wealth. That in turn builds our economy and our communities.
PBN: What guidance would you offer to Realtors and clients navigating an evolving regulatory landscape in 2026, especially as tax laws and compliance requirements continue to shift?
STAAF: Buying property is a big step and a big investment, and hefty penalties can arise from non-compliance of laws and regulations. Staying current with any changes is critical for our members to properly advise their clients.
The Rhode Island Association of Realtors continually keeps our members on top of the latest regulations and laws through email, social sites, webinars, continuing education and web updates. We also have a legal hotline for our members, should any of them have questions. It is also a good idea for Realtors and their clients to contact the Excise Taxation Division of the Rhode Island Division of Taxation, or other tax professionals, such as CPAs [certified public accountants] or tax attorneys for assistance with compliance.
Marc Larocque is a PBN contributing writer. Contact him at Larocque@PBN.com. You may also follow him on X at @Marc_La_Rock.
