Bill Sponsors
McGaw, and Shallcross Smith
Committee
House Municipal Government & Housing
Summary
Select
This legislation authorizes the town of Little Compton to implement a homestead exemption for real estate taxes. This exemption allows the town to reduce the taxable value of residential properties owned by residents who live there for more than six months a year. The exemption is initially set at 10% of the mean assessed value of properties in the town, with future adjustments allowed between 5% and 15%. The bill outlines eligibility for registered voters, non-voters, owners of second homes in town, and landlords who rent to full-time residents without increasing rent.
Sponsor
Analysis
Pros for Progressives
- Incentivizes rent stabilization by offering tax exemptions to landlords who rent to full-time residents and agree not to increase rental payments, potentially protecting tenants from price hikes.
- Provides financial relief to year-round residents, which may help lower-income families and seniors on fixed incomes retain their homes in an area with high property values.
- Shifts the relative tax burden toward non-resident vacation homeowners and short-term rentals, prioritizing the economic well-being of the actual community members over absentee investors.
Cons for Progressives
- Allows residents to claim a tax exemption on a second residential dwelling, effectively providing government-subsidized financial relief to wealthier individuals who can afford multiple properties.
- Links automatic qualification for the benefit to voter registration status, which creates a barrier for residents who are eligible to vote but choose not to, or those who cannot vote.
- Calculates the exemption based on the "mean assessed value" of all properties, which in a wealthy coastal town could result in a disproportionately high deduction that benefits high-value property owners more than necessary.
Pros for Conservatives
- Reduces the property tax burden for homeowners, allowing citizens to retain more of their income and protecting private property rights from excessive government taxation.
- Ensures local control by requiring the homestead exemption and its specific percentage to be approved annually by the financial town meeting, giving taxpayers direct oversight.
- Encourages long-term residency and homeownership, which fosters community stability and preserves the traditional character of the town against transient populations.
Cons for Conservatives
- Interferes with the free market by conditioning tax breaks for landlords on the freezing of rental rates, effectively implementing a form of soft rent control.
- Redistributes the tax burden to non-resident property owners who do not have a vote in the town meeting, effectively taxation without local representation for vacation home owners.
- Creates potential bureaucratic inefficiencies and errors by automatically enrolling individuals based on government voter registration lists rather than requiring all citizens to proactively apply.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- Little Compton Homeowners
- Renters
- Landlords
- Non-resident Property Owners
- Registered Voters
Towns Affected
Little Compton
Cost to Taxpayers
Amount unknown
Revenue Generated
None
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Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 01/09/2026 Introduced, referred to House Municipal Government & Housing
Bill Text
SECTION 1. Chapter 44-5 of the General Laws entitled "Levy and Assessment of Local Taxes" is hereby amended by adding thereto the following section:
44-5-79.1. Little Compton -- Homestead exemption.
(a) The town council, upon approval by the financial town meeting, is authorized to annually fix the amount of a homestead exemption with respect to the assessed value from local taxation on taxable real property used for residential purposes in the town of Little Compton and to grant homestead exemptions to the owner(s) of those residential dwellings in percentage amounts as follows:
(1) In the first year the exemption will be ten percent (10%) of the mean assessed value of all taxable real properties in the town of Little Compton.
(2) In each subsequent fiscal year, the financial town meeting may, by majority vote, amend the percentage described in subsection (a)(1) of this section, within a range of not less than five percent (5%) or more than fifteen percent (15%) of the mean assessed value of all taxable real properties in the town of Little Compton.
(b) All residents who own the residential dwelling in which they reside and are registered to vote in the town of Little Compton shall automatically qualify for the homestead exemption and shall not be required to file an application for the homestead exemption.
(c) Non-registered voters who are residents of the town of Little Compton and who own the residential dwelling in which they reside may apply for the homestead exemption on forms supplied by the Little Compton tax assessor and by demonstrating residency in Little Compton with a Rhode Island driver’s license or other official identification and a utility bill showing the name and address of the resident.
(d) Residents of Little Compton who own more than one residential dwelling located in Little Compton may also apply for a homestead exemption on a second residential dwelling using the process set forth in subsections (b) and (c) of this section.
(e) A residential dwelling leased for at least twelve (12) months to a full-time resident may also be eligible for a homestead exemption so long as the rental payments remain at the same amount at the start of the next twelve (12) month lease cycle following the approval of the exemption. The Little Compton tax assessor shall supply application forms for rental property homestead exemptions, to be filed along with the lease agreement, and additional identifying information for the tenant(s) as determined by the tax assessor.
(f) For the purposes of this section, the term “resident” means an individual whose principal place of residence is located within the town of Little Compton and who occupies such dwelling for more than six (6) months of the calendar year.
SECTION 2. This act shall take effect upon passage.
44-5-79.1. Little Compton -- Homestead exemption.
(a) The town council, upon approval by the financial town meeting, is authorized to annually fix the amount of a homestead exemption with respect to the assessed value from local taxation on taxable real property used for residential purposes in the town of Little Compton and to grant homestead exemptions to the owner(s) of those residential dwellings in percentage amounts as follows:
(1) In the first year the exemption will be ten percent (10%) of the mean assessed value of all taxable real properties in the town of Little Compton.
(2) In each subsequent fiscal year, the financial town meeting may, by majority vote, amend the percentage described in subsection (a)(1) of this section, within a range of not less than five percent (5%) or more than fifteen percent (15%) of the mean assessed value of all taxable real properties in the town of Little Compton.
(b) All residents who own the residential dwelling in which they reside and are registered to vote in the town of Little Compton shall automatically qualify for the homestead exemption and shall not be required to file an application for the homestead exemption.
(c) Non-registered voters who are residents of the town of Little Compton and who own the residential dwelling in which they reside may apply for the homestead exemption on forms supplied by the Little Compton tax assessor and by demonstrating residency in Little Compton with a Rhode Island driver’s license or other official identification and a utility bill showing the name and address of the resident.
(d) Residents of Little Compton who own more than one residential dwelling located in Little Compton may also apply for a homestead exemption on a second residential dwelling using the process set forth in subsections (b) and (c) of this section.
(e) A residential dwelling leased for at least twelve (12) months to a full-time resident may also be eligible for a homestead exemption so long as the rental payments remain at the same amount at the start of the next twelve (12) month lease cycle following the approval of the exemption. The Little Compton tax assessor shall supply application forms for rental property homestead exemptions, to be filed along with the lease agreement, and additional identifying information for the tenant(s) as determined by the tax assessor.
(f) For the purposes of this section, the term “resident” means an individual whose principal place of residence is located within the town of Little Compton and who occupies such dwelling for more than six (6) months of the calendar year.
SECTION 2. This act shall take effect upon passage.