Learning Center
We keep you up-to-date on the latest tax changes and news in the industry.
The “Taylor Swift Tax”: $17M Mansion Sparks Debate Over Luxury Second Homes
When you hear "Taylor Swift tax," it might sound like a Taylor-made tribute. But no, this isn’t a tribute. It’s an inside joke meshed into the serious business of housing policy.
The state of Rhode Island has proposed a new surcharge on luxury second homes that aren’t primary residences. Under the plan, Realtor.com explains, non-owner‑occupied properties valued at more than $1 million would pay an extra $2.50 per $500 of value above that first million. For example, a $2 million waterfront home could incur $5,000 in additional annual property taxes. The policy expressly rings in July 2026 and includes an inflation adjustment starting mid‑2027. Importantly, if a homeowner rents out the property for more than 183 days, the surcharge doesn't apply.
Why It’s Called the "Taylor Swift Tax"
The nickname isn’t official from a government standpoint, but it is becoming the common term for the tax in the press. Taylor Swift owns a lavish Watch Hill, Rhode Island mansion, estimated at around $17 million. Under the surcharge, that estate alone could cost her $136,000 extra per year. The name stuck, part meme, part shorthand, but the law targets all luxury second homes, not just hers.
The history of Taylor’s home, High Watch, is a fascinating one. It was built between 1929 and 1930 for the Snowden family, owners of an oil company. They aptly named the summer home Holiday House. It was purchased in 1948 by socialite Rebekah Harkness, of the Standard Oil family, who loved throwing lavish, Gatsby-style parties. In 1974, businessman Gurdon B. Wattles renovated the home, renaming it High Watch.. Swift purchased the property for US$17,750,000 in 2013, and it ultimately inspired her 2020 song "The Last Great American Dynasty.”
What Are Lawmakers Saying?
Senator Meghan Kallman, who backs the measure, told Newsweek it’s about fairness: “By asking these owners to pay their fair share, Rhode Island can generate much-needed revenue and prevent cuts to essential services like health care and education,” especially since many of these properties are purchased by out‑of‑state buyers who don’t contribute as much to the local economy.
Supporters argue the law could help:
Plant more people and energy back into "lights‑out" neighborhoods where homes sit empty most of the year
Fund affordable housing via the additional tax revenue
Critics—particularly those in the real estate industry—warn the tax might backfire. They argue it could:
Disincentivize investment in expensive properties
Lower property values or push long-time owners to sell
Potentially unfairly penalize families with deep, generational ties to their homes
The possible new tax is certainly garnering buzz online thanks to its nickname. Dave Portnoy of Barstool Sports chimed in with a wink: while he doesn't own property in Rhode Island, he joked he'd beflattered if Massachusetts adopted a “Dave Portnoy tax” after him.
What Happens Next?
The proposal’s not a done deal—but if approved, it gives homeowners a grace period until mid‑2026 to either:
Prove they occupy the home for at least 183 days (and dodge the surcharge), or
Lease it out and keep the property active
It’s both a carrot and a stick; encourage residence or revenue, or face the luxury penalty.
Rhode Island is far from alone in taking action. Montana, for instance, is set to shift more of the property tax burden onto non-resident second-home owners—especially Californians—as part of its 2026 property-tax overhaul. Meanwhile, California has taken its own approach. Although there’s no statewide “Taylor Swift tax,” Los Angeles voters passed Measure ULA, enacting a “mansion tax” on high-end property sales—4% on transactions between $5 million and $10 million, and 5.5% beyond that.
Further north in South Lake Tahoe, California, a ballot initiative (Measure N) proposes taxing vacation homes left vacant more than six months each year—up to $6,000 annually—with proceeds aimed at bolstering affordable housing and local projects. And across the Bay, several cities like Oakland, Berkeley, and San Francisco have already enacted vacancy taxes: Oakland charges $3,000–$6,000 per year for homes unoccupied more than 50 days; Berkeley similarly taxes long-vacant residences; and San Francisco’s ambitious “Empty Homes Tax” was set on a graduated scale, though it was struck down in court in November 2024.
In short, states and cities—from Rhode Island and Montana to California and its municipalities—are experimenting with tax tools targeting underused luxury and second homes. The goal, of course, is to generate revenue, encourage occupancy, and address local housing challenges—though the policy approaches widely vary depending on political and legal climates.
The “Taylor Swift tax” may have a cheeky name, but it's rooted in a serious issue. How can communities nudge absentee wealth to support local stability? As coastal towns grapple with affordability, policymakers are testing whether taxing luxury homes is sound economics or just a catchy headline. Whatever the outcome, Swifties and non-Swifties alike will be watching closely.
Want our best tax and accounting tips and insights delivered to your inbox?
Sign up for our newsletter.
Benefits of having a business advisor
Your CFO, Reimagined as a Financial Doctor
Diagnosing root causes, prescribing solutions, and guiding your property business toward long-term wealth.
Our CFO | Advisor
Raquel is a passionate business owner. Now, she is returning to her grassroots with a twist - guiding clients with her expertise as a CPA, she can advise your company as your trusted CFO and Advisor.
-
Raquel Deodanes, MS, CPA
Co-Founder✅ CPA with Real-World Experience – I help property managers stay profitable, tax-efficient, and cash flow positive.
✅ Tax Strategist – Former advisor at California’s revenue agency.
✅ Trusted by 4,000+ Businesses – Experience across CA, FL, TX, NV, and beyond.
✅ Real Estate Investor – I understand the financial realities of property management.
✅ Entrepreneur – I’ve built businesses and know the challenges you face.
Frequently Asked Questions
-
We diagnose financial inefficiencies, treat problems like poor cash flow or rising costs, and guide you to long-term financial health. That includes cleaning up your books, forecasting cash flow, optimizing operations, and helping you grow your portfolio with confidence — just like a doctor builds a custom care plan for a patient.
-
Bookkeepers record transactions. CPAs file your taxes. We connect the dots — helping you understand your numbers, strategically improve them, and make smarter decisions throughout the year. We work alongside your existing team to drive performance, not just compliance.
-
If you're unsure where your cash is going, struggling with rising costs, planning to scale, or just tired of reacting instead of planning — now is the right time. We help you get ahead of problems, not just clean up after them.
-
Clients typically see improved cash flow, cleaner books, higher NOI, better financial reporting, and a lot less stress at tax time. More importantly, you gain clarity, confidence, and control over your business — and a partner who helps you grow it.
Pricing
Painless, transparent pricing.
Let us take away your stress and give you back your time. Choose your perfect package today.
Base
-
Dedicated finance expert
-
Bookkeeping with accrual basis
-
Includes P&L, balance sheet, and cash flow statements
Core
-
Includes everything in Base, PLUS
-
Industry KPIs and financial ratios
-
Monthly virtual 1-hr meetings
-
Monthly rolling budget forecasts
Growth
-
Includes everything in Base, CORE
-
Budget vs. actuals variance analysis and review
-
Payroll and HR Platform