Rhode Island imposes a real estate conveyance tax on most property transfers where the consideration paid exceeds $100. As of October 1, 2025, the rate is $3.75 per $500 of consideration for Tier 1, and a second tier applies to residential sales above a statutory threshold that was indexed to $824,000 for 2026. If you are closing on a home in Rhode Island this year, both changes affect your settlement statement.

TL;DR:

  • The conveyance tax rate in Rhode Island increased to $3.75 per $500 on October 1, 2025, affecting both tiers for commercial and residential properties.
  • For residential sales exceeding $824,000 in 2026, the same rate applies to the amount above this indexed threshold, reducing surprises for buyers near the threshold.
  • Sellers generally pay the tax at the time of recording, but agreements can shift this burden to buyers, and consideration includes liens and mortgage payoffs.
  • Transfers of ownership interests in real estate companies can trigger the tax, requiring advance notice and specific filings with municipalities.
  • Exemptions exist for government transfers and certain statutory circumstances, but thorough review of consideration calculations and contractual terms is essential to avoid delays.
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Table of Contents

What the conveyance tax covers and when it applies

The tax attaches to deeds, instruments, and writings that transfer real property in Rhode Island whenever the consideration paid tops $100, according to the Rhode Island Division of Taxation. Consideration is not just the sale price on paper. It also includes any liens or encumbrances the buyer assumes or that get paid off at closing, so a property with an outstanding mortgage balance still counts that balance toward the taxable total.

A less common but important trigger involves acquired real estate companies, where a transfer of ownership interests (rather than a deed) can still create conveyance tax liability. This matters for:

  • Standard residential and commercial deed transfers recorded with the town or city.
  • Sales where the buyer assumes an existing mortgage or lien.
  • Transfers of controlling interests in entities that hold Rhode Island real estate.

Recording a deed without accounting for these consideration rules is one of the more common ways closings get delayed at the municipal land records office.

Current rates, tiers, and recent law changes

Rhode Island’s conveyance tax structure has two tiers, and both changed on October 1, 2025. The Division of Taxation’s advisory raised the rate to $3.75 per $500 of consideration for Tier 1, which applies to the full transaction amount, and the same $3.75 per $500 rate applies to Tier 2 on the portion of residential consideration above the statutory threshold.

Illustration of two-tier transfer tax structure

$3.75 per $500 is the current conveyance tax rate for both tiers, effective October 1, 2025, replacing the prior lower rate structure.

Tier 2 only applies to residential property, and only to the amount of consideration that exceeds the threshold. That threshold is not fixed: it adjusts annually based on CPI-U, and the 2026 indexed amount is $824,000. A few points worth tracking:

  • Tier 1 applies to every dollar of consideration, residential or commercial.
  • Tier 2 applies only to the residential consideration above the annually indexed threshold.
  • The Division of Taxation publishes the updated threshold each year through a new advisory, so the number for 2027 will differ from 2026.

The October 2025 advisory also describes changes to how conveyance tax revenue gets distributed between the state and municipalities, a detail closing attorneys and sellers should be aware of even if it does not change the amount due at the table.

How to calculate the conveyance tax

The formula is straightforward once you know which tier applies: divide the consideration by $500, then multiply by the applicable rate.

  1. Divide total consideration by $500, rounding up to the next whole increment for any fraction.
  2. Multiply the result by $3.75 to get Tier 1 tax.
  3. If the property is residential and consideration exceeds the 2026 threshold of $824,000, apply the same $3.75 per $500 rate to the amount above that threshold and add it to the Tier 1 figure.

Example: a Rhode Island home sells for $800,500. Divide $800,500 by $500 to get 1,601, then multiply by $3.75 for a Tier 1 tax of $6,003.75. Since $800,500 falls under the $824,000 threshold, no Tier 2 tax applies in this case. Had the sale price exceeded $824,000, the amount above that line would be taxed a second time at the same per-$500 rate. Mobile and manufactured homes are typically subject to their own recording and titling rules rather than the standard deed-based conveyance tax, so confirm treatment with the municipal clerk before closing.

Who pays, timing, and the recording process

Under R.I. Gen. Laws § 44-25-1, the transferor, meaning the seller, pays the conveyance tax by default. Buyers and sellers can agree in the purchase contract to shift or split that burden, and many Rhode Island purchase agreements do address it directly, so check the contract language rather than assuming the default applies.

Payment happens at the point of deed recording, not before. In practice, closing attorneys collect the tax as part of settlement funds and remit it when they record the deed with the municipal land records office. A few mechanics to know:

  • Most conveyances are documented on a standard municipal filing, often referred to as CVYT-1.
  • Acquired real estate company transfers use a separate filing, CVYT-2, because the transfer involves an entity interest rather than a simple deed.
  • The municipality applies a recording stamp evidencing that the tax was paid before the deed is entered into the public record.

Exemptions and special statutory rules to check

Not every transfer triggers the tax. Rhode Island law exempts certain governmental transfers and some transfers between specific parties, and the statute itself is the authoritative reference for confirming whether a specific transaction qualifies. A few areas deserve extra attention before you assume you are exempt or that your calculation is complete:

  • Government-to-government transfers and certain transfers exempted by statute do not trigger the conveyance tax.
  • Acquired real estate company transfers require advance notice to the Division of Taxation, and when the company holds property in more than one municipality, the tax gets allocated proportionately by assessed value.
  • Consideration for calculation purposes includes any lien or mortgage balance paid off or assumed at closing, not just the cash changing hands.

Pro Tip: Always ask your closing attorney to show the full consideration figure used for the conveyance tax calculation, including any payoff amounts, before you sign the settlement statement.

Practical closing checklist for Rhode Island buyers, sellers, and counsel

A little diligence before closing day prevents recording delays and unexpected costs.

  1. Confirm the purchase agreement states who pays the conveyance tax, since the statutory default can be reallocated by contract.
  2. Review the settlement statement line item for conveyance tax and check that the consideration figure includes any assumed liens.
  3. Verify the closing attorney or title company will escrow and remit the tax at the time of recording.
  4. Contact the city or town clerk’s land records office directly if your municipality’s recording practice or online records are unclear.
  5. Loop in counsel early for entity transfers, multi-municipality properties, or acquired real estate company situations, since these carry separate notice and filing requirements.

Local perspective: why the 2025 and 2026 changes matter for RI closings

The October 2025 rate increase and the 2026 threshold indexing are not cosmetic changes. Indexing the Tier 2 threshold to CPI-U means fewer mid-market Rhode Island home sales will drift into the higher tier purely because of price appreciation, which reduces year-to-year surprises for sellers near the line. The rate increase itself also shifted how revenue gets distributed toward housing and municipal funds, a detail that matters more to policy watchers than to a single closing, but one that explains why the Division updates its guidance annually rather than leaving the numbers static.

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If you need to sell fast, here’s how transfer tax fits in

If a traditional sale timeline does not work for your situation, consider resources on how to sell your home for cash, as-is, without agent fees or commissions, and close on a schedule you choose.

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Conveyance tax still applies to a cash sale the same way it applies to any other deed transfer in Rhode Island, so the amount due depends on your sale price and which tier it falls under. A few things worth confirming before you sign:

  • Ask who is responsible for the conveyance tax in the purchase agreement, since the statutory default puts it on the seller unless the contract says otherwise.
  • Confirm how closing logistics, including tax remittance and recording, will be handled and by whom.
  • If you inherited the property you are selling, review our guide on tax consequences when selling an inherited house before you finalize a sale price.

Get a cash offer and see your numbers before you commit to anything.

Sources

For the current rate, threshold, and filing forms, go directly to the Real Estate Conveyance Tax page maintained by the Rhode Island Division of Taxation. The statutory language sits in R.I. Gen. Laws § 44-25-1, and municipal recording questions should go to your city or town clerk through the Rhode Island land-records directory.

This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.

FAQ

What is a transfer tax?

A transfer tax, called a conveyance tax in Rhode Island, is a fee charged when real property changes ownership through a deed or similar instrument. Rhode Island applies it whenever the consideration paid exceeds $100, calculated per $500 of that consideration.

Do Massachusetts and Rhode Island have tax reciprocity?

Rhode Island’s conveyance tax and Massachusetts’s transfer tax are separate state-level taxes with no reciprocity agreement between them. Each state taxes real property transfers within its own borders under its own statute, so a Rhode Island closing follows R.I. Gen. Laws § 44-25-1 regardless of where the parties live.

Is Rhode Island a heavily taxed state?

Rhode Island’s real estate conveyance tax rate is $3.75 per $500 of consideration as of October 1, 2025, with a second tier for residential sales above the 2026 threshold of $824,000. Whether that makes the state’s overall tax burden high depends on other factors like property tax rates and income tax, which fall outside the conveyance tax itself.

Is deed tax the same as transfer tax?

Deed tax and transfer tax generally refer to the same charge, though Rhode Island specifically calls its version the real estate conveyance tax. It applies to the deed or instrument used to transfer property, calculated under R.I. Gen. Laws § 44-25-1.

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