Understanding Rhode Island’s Real Estate Transfer Tax
Learn about the Rhode Island real estate transfer tax: Understand how it affects your property sale and learn about exemptions.
If you’re selling a home in Rhode Island, you’ll likely pay a Rhode Island real estate transfer tax at closing. This tax is a fee on property sales, usually based on the sale price.
This guide will explain how transfer taxes work in Rhode Island, who pays them, and what rates apply at the state and local levels. We’ll also cover exemptions, deductions, and other fees sellers should know about.
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What are transfer taxes?
A real estate transfer tax is a fee charged by state or local governments when property ownership changes hands. According to the Federal Trade Commission, this tax applies when the title—the legal proof of ownership—is officially transferred from the seller to the buyer.
The amount owed depends on the property’s location, as transfer tax rates vary at the state, county, and city levels. Like other taxes, these fees help generate revenue for public services and infrastructure.
Who pays for transfer taxes?
The responsibility of transfer taxes depends on where the property is sold. In Rhode Island, typically, the seller pays the Rhode Island real estate transfer tax. However, if the transaction agreement allows for it, and both parties agree, the buyer can cover it.