'Taylor Swift tax' proposed in Rhode Island

(NewsNation) — Rhode Island officials just shared their new budget proposals, with one including what is being unofficially referred to as the "Taylor Swift tax."

The "Taylor Swift tax" would add costs to seasonal or second homes. Another measure would reportedly increase a seller's fee by 63% overall.

The Rhode Island Association of Realtors has raised concerns that the proposed changes would hit both homesellers and buyers, which could make the market more unaffordable.

The association's president, Chris Whitten, told NBC 10 News, "Please, don't take from our housing market at the moment to balance the budget for other items, it's going to be detrimental."

'Taylor Swift tax' to affect second homes worth over $1M

The budget proposals are specifically targeting the high-end vacation homes. The unofficially named "Taylor Swift tax" would put a new surcharge on second homes that are worth over $1 million. If this proposal is approved, it would add an additional fee for owners of nonprimary residences that are empty for over half the year.

That annual fee would be $2.50 for every $500 of value that is above the $1 million mark. So, a home that is $2.5 million and sits empty for over half the year could have an extra $7,500 in taxes each year. For Swift's Watch Hill estate, she could owe an additional $136,000 a year in taxes.

Swift purchased that estate, which is three floors with seven bedrooms and nine bathrooms, in 2013 for $17.75 million. She has been known to have celebrities over for parties, like her Fourth of July parties. Called the Westerly Mansion, the home that was built in 1904 was also the inspiration for one of the songs on Swift's 2020 "Folklore" album, "The Last Great American Dynasty."

The other proposal would affect what sellers have to pay during closing. The conveyance tax would go from $2.30 to $3.75 for every $500, which would be a 63% increase. According to Zillow, the average selling price of a home in Rhode Island is around $492,939. With the new rate, the tax would go from $2,200 to $3,700.