The Rhode Island real estate transfer tax, formally called the real estate conveyance tax, is $3.75 for every $500 of the sale price on any transfer of real property for more than $100. Residential sales above $800,000 carry an additional $3.75 per $500 on the portion over that threshold, which doubles the rate on the high end. The tax is paid when the deed is recorded with the city or town clerk, and no deed enters the public land records until it clears.
Current Rates and How They Stack
As of October 1, 2025, the tax runs on two tiers. Tier 1 applies to every transfer: $3.75 per $500 of consideration, which works out to 0.75% of the sale price.1RI Division of Taxation. Conveyance Tax Increase Advisory 2025-13 This rate replaced the old $2.30 per $500 rate, so older calculators and stale closing estimates will undercount.
Tier 2 applies only to residential property sold for more than $800,000. On the portion of the price above $800,000, an extra $3.75 per $500 is added on top of Tier 1, bringing the combined rate on the excess to 1.50%.2Rhode Island General Assembly. Rhode Island Code 44-25-1 – Tax Imposed – Payment – Burden Commercial and industrial property never trigger Tier 2, regardless of price.
Starting January 1, 2026, the $800,000 threshold adjusts annually for inflation using the Consumer Price Index for All Urban Consumers as of September 30 of the prior year.2Rhode Island General Assembly. Rhode Island Code 44-25-1 – Tax Imposed – Payment – Burden Confirm the current-year figure with the Rhode Island Division of Taxation or your closing attorney before you rely on a number.
Mobile and manufactured homes have their own lower rate: $1.40 per $500 of consideration, or 0.28%.3RI Division of Taxation. Form CVYT-1 Real Estate Conveyance Tax Return
How to Calculate What You’ll Owe
Take a residential sale at $900,000. Tier 1 covers the full price: $900,000 divided by $500 gives 1,800 units, times $3.75, equals $6,750. Tier 2 covers only the $100,000 above the threshold: 200 units times $3.75 equals $750. Total tax: $7,500.
A $400,000 residential sale skips Tier 2 entirely. That’s 800 units at $3.75, or $3,000. A $400,000 commercial sale comes out to the same $3,000, since Tier 2 only applies to residential property above the threshold.
Fractional units round up. A sale price of $400,250 is treated as 801 units, not 800. Always round the units up before multiplying.
Who Actually Pays
By default, the seller pays. The statute puts the obligation on the grantor unless the parties agree otherwise.2Rhode Island General Assembly. Rhode Island Code 44-25-1 – Tax Imposed – Payment – Burden The closing attorney typically holds the funds in escrow and pays the clerk at recording.4RI Division of Taxation. Real Estate Conveyance Tax
Because the statute lets the parties shift the cost by agreement, it’s a negotiation point. In a tight market, sellers sometimes push the buyer to cover it. Whatever you decide, put it in the purchase and sale agreement. The private allocation does not affect the clerk: no payment, no recording.
What’s Exempt (and What Isn’t)
Rhode Island’s exemption list is narrower than most sellers expect. The statute exempts:5Rhode Island General Assembly. Rhode Island Code 44-25-2 – Exemptions
- Mortgages and other instruments given to secure a debt, since the tax targets ownership transfers rather than liens.
- Deeds where the United States, Rhode Island, or a political subdivision is the grantor.
- Acquisitions by the state or a political subdivision — no municipality or land trust may impose a transfer tax when a government body buys.
- Qualifying sales of a mobile or manufactured home community to a resident-owned cooperative.
- Transfers of ownership among partners or members of a real estate company holding an affordable housing development financed with federal low-income housing tax credits, or involving a Rhode Island nonprofit subject to recorded affordability restrictions.
What’s not on the list matters as much as what is. Transfers between family members, transfers into a revocable living trust, and changes in the form of ownership are not exempt. Unlike some other states, Rhode Island taxes these. If you deed your home to a spouse, a child, or your own trust for consideration above $100, the conveyance tax applies. Transfers for $100 or less fall below the statutory trigger and owe nothing.2Rhode Island General Assembly. Rhode Island Code 44-25-1 – Tax Imposed – Payment – Burden
Selling Through an Entity
You cannot sidestep the tax by selling ownership interests in a company that holds real estate. When 50% or more of the ownership of a “real estate company” changes hands within a three-year period, the transaction is treated as a direct property transfer and the full tax applies.2Rhode Island General Assembly. Rhode Island Code 44-25-1 – Tax Imposed – Payment – Burden
A real estate company is a corporation, LLC, partnership, or similar entity where 90% or more of the ownership is held by 35 or fewer people and the entity either derives at least 60% of its annual gross receipts from real estate or holds real estate worth 90% or more of its total tangible assets. The tax is calculated on the consideration paid for the ownership interest, including any proportional share of debt on the property.2Rhode Island General Assembly. Rhode Island Code 44-25-1 – Tax Imposed – Payment – Burden
Extra Withholding for Out-of-State Sellers
Sellers who live outside Rhode Island face a separate withholding requirement at closing. The buyer, in practice the closing attorney, must withhold 6% of the net proceeds paid to a nonresident individual, estate, partnership, or trust, and 7% for nonresident corporations, and send it to the Rhode Island Division of Taxation within three banking days of closing.6Rhode Island General Assembly. Rhode Island Code 44-30-71.3 – Withholding on Sales of Real Property by Nonresidents
This is not an additional tax. It’s a prepayment of Rhode Island income tax on the gain. When the seller files a Rhode Island return, the withheld amount is credited against actual tax owed, and any excess is refunded. Nonresident sellers who don’t plan for it can find a meaningful piece of their proceeds held back at the table, which is a problem for anyone relying on those funds for a simultaneous purchase.
Recording Mechanics
The tax is paid to the clerk of the city or town where the property is located, and payment is evidenced by a stamp affixed to the original deed.4RI Division of Taxation. Real Estate Conveyance Tax If the transfer is exempt, the deed must carry a statement explaining why no stamps are required. A separate municipal recording fee applies on top of the conveyance tax; your closing attorney or title company will show both on the closing disclosure.
Federal Treatment and 1031 Exchanges
The conveyance tax is not deductible as a real estate tax on your federal return.7Internal Revenue Service. Publication 530 – Tax Information for Homeowners It still has federal tax value, just not through a deduction. A seller who pays it treats it as a selling expense, which reduces the amount realized and therefore the gain. A buyer who pays it adds it to basis, which reduces gain on a later sale.8Internal Revenue Service. Publication 523 – Selling Your Home For sellers using the Section 121 exclusion ($250,000 single, $500,000 joint), the conveyance tax reduces gain before the exclusion runs; if your gain is already inside the exclusion, the treatment is academic.
For a Section 1031 like-kind exchange on investment or business property, the conveyance tax qualifies as a transactional cost that can be paid from exchange proceeds without being treated as constructive receipt.9IPX1031. Closing Costs and the Tax Deferred Exchange Let your qualified intermediary handle the payment out of the exchange account. Pulling funds out yourself to pay the tax directly could be treated as boot.