Rhode Island Real Estate Transfer Taxes: An In-Depth Guide (2024 Update)

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By Jon Stubbs Updated March 19, 2024

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Who pays transfer taxes? | When are transfer taxes paid? | Methodology

Rhode Island's current transfer tax rate is $2.30 per $500. So, for a house worth $457,952 — the median home price in the state — the transfer tax due will be $1,832.

The specifics on who pays the transfer tax in Rhode Island are sometimes up for negotiation, but usually the seller is responsible.

Clever Real Estate can help you cut costs here — our concierge team will partner you with an experienced agent who can help you negotiate a good deal with your buyer on transfer taxes. You'll save big by paying only 1.5% in commission, which is much less than the Rhode Island average of 3.00%.

💰 Find an agent who can negotiate your transfer taxes

You can't change transfer tax rates. But, an experienced Clever Real Estate agent can help you win the negotiation battle so you aren't stuck paying all of the transfer taxes on your own.

When you choose Clever, you'll work with a full-service realtor with transfer tax expertise in your local market.

Clever's service is totally free, with zero obligation — you can walk away at any time.

Who pays transfer taxes in Rhode Island: The buyer or the seller?

The seller is usually responsible for the realty transfer tax.

Check with your local real estate agent to see if there are any exemptions for this tax. Some states allow family members to transfer property without paying the realty transfer tax, but it is not clear whether or not Rhode Island is such a state.

When do you pay transfer taxes in Rhode Island?

Transfer taxes are due at closing. Proof of payment is stamped on the deed so the Rhode Island recording clerk can see that the tax was paid.

How Much Are Transfer Taxes in Rhode Island?

The current rate for the Rhode Island transfer tax is $2.30 per $500 of the sale. Part of this money goes to the local government and part goes to the state.

For an average-priced $457,952 home, the transfer tax due will be $1,832.

Can You Deduct Transfer Taxes?

While property taxes may help relieve your tax bill at the end of the year, transfer taxes are not tax deductible. The IRS does not consider transfer tax a "sales tax."

If you are the seller, you can include the transfer tax in the "cost basis" of the property.

This is how it works:

You sell a property and make money on the sale. You may be charged a capital gains tax on the amount of money that you made. The amount you spent on the transfer tax can be subtracted from your profit so that your capital gains tax bill can be reduced.

This reduction isn't even necessary if you owned the home for more than two years. If you lived in the house for two of the last five years, a married couple could exclude $500,000 of capital gains anyway.

Other Considerations

When learning about complicated issues like taxes and closing costs, sometimes it is easier to have a professional sit across the kitchen table from you to explain things. That's why you should reach out to a Clever Partner Agent in Rhode Island.

Whether you are buying or selling a home, your real estate agent will talk you through the process and make sure you understand all the different fees and taxes that you will be charged at closing.

We’ll partner you with a local real estate agent who knows how to deal with the state’s tax and helps negotiate a deal in your favor. What’s more, our agents charge only a 1.5% listing fee compared to the state average of 3.00%! The money you'll save can more than offset the cost of the transfer taxes.

» SAVE: Learn more about how a Clever agent can help you navigate Rhode Island transfer taxes

Methodology

  • Transfer tax amounts are based on government website information as of February 2024.
  • We gathered our listing commission rate data from a December 2023 survey of 630 of our partner agents.
  • Home values, list prices, and sale prices are based on Zillow data as of April 2024.

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