A new tax on properties with more than $15 million in sales would discourage private equity groups from buying up homes, which would help first-time homebuyers, according to Rep. Brian Newberry.
The Real Estate Conveyance Tax would levy a $6.90 tax for every $500 paid for a single-family home. The tax would apply to corporations with assets over $15 million. The revenue from the tax would be placed in the state’s Housing Production Fund to build more affordable homes.
“This bill kills two birds with one stone,” said Newberry, (Republican – District 48, N Smithfield/Burrillville). “Our goal is to help first-time homebuyers by disincentivizing corporations interested in buying up our limited single-family housing stock. This win-win legislation also provides a potential bolster to the state’s only annual housing production funding stream. This is a concrete proposal to better the housing climate in Rhode Island.”
According to Newberry, private equity groups are buying up homes in Rhode Island at an “alarming rate” with the current market conditions. This is a trend that is not unique to Rhode Island, but it is exacerbating existing financial woes, he said.
The tax is part of a broader effort to build more affordable homes in Rhode Island. The state has been facing an unprecedented housing shortage for several years, which has led to soaring home prices and rents. The tax is hoped to discourage corporate buy-ups and stabilize the housing market, making homes more affordable for first-time buyers.
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Representative Newberry Sponsors Real Estate Conveyance Tax bill
Seeks to disincentivize corporate buy up of Rhode Island’s limited Housing Stock
State House, Providence – Currently, in the United States, private equity backed corporations such as American Homes 4 Rent and Innovation Homes are buying up single family homes at an alarming rate. While this is not a new phenomenon, given the current economic and housing market conditions, these buy ups have exacerbated many of the financial woes held not only by Rhode Islanders, but Americans nationwide.
Rhode Island is currently facing an unprecedented housing shortage which is contributing to a dramatic increase in both rent and home prices. A large-scale corporate buy up of residential property in Rhode Island could prove to be devastating, given the current economy and housing market.
“The Real Estate Conveyance Tax” sponsored by Representative Brian C. Newbery (District 48, N Smithfield/Burrillville), aims to disincentivize private equity backed corporations from purchasing Rhode Island’s limited single-family housing stock, alleviating some of the competition faced by first time homebuyers. The bill authorizes an additional tax at the rate of $6.90 for every $500 paid for the purchase of a single-family dwelling. This new tax would be levied against corporations/corporate entities with assets over $15 million.
Should corporations/corporate entities decide to eat the additional cost brought on by this new tax, revenues from this tax would be added to the state’s Housing Production Fund to promote the construction and rehabilitation of more affordable housing units.
“This bill kills two birds with one stone,” said Representative Newberry. “Our goal is to help first time homebuyers, by disincentivizing corporations interested in buying up our limited single-family housing stock. This win-win legislation also provides a potential bolster to the state’s only annual housing production funding stream. This is a concrete proposal to better the housing climate in Rhode Island.”
Generative artificial intelligence (AI) assisted a What’sUpNewp journalist with the reporting included in this story.
