Property Tax Relief in Rhode Island

Property taxes in Rhode Island are high compared to the rest of the country. According to the Tax Foundation, Rhode Island ranked fifth among the states in 2009 with median property taxes of $3,618 paid on homes. The state ranked twelfth in terms of taxes as a percentage of home value, at 1.35%.

Property taxes are levied by cities and towns in Rhode Island and tax rates vary across the state. You can find a list of municipal tax rates on the Rhode Island Department of Revenue website. The rates are expressed in taxes per thousand dollars of assessed property value.

There are a variety of property tax exemptions available to certain homeowners. These exemptions also vary by city and town as to the types of exemptions available and the amounts of the exemptions. For example, in the City of Providence there are property tax exemptions for veterans, homeowners age 65 or older or age 62 or older who receive Social Security benefits, homeowners who are 100% disabled according to Social Security, and homeowners who are blind. Homeowners with total annual income of less than $25,000 can have their property taxes limited to a 5.5% increase over the prior year.

In the City of Pawtucket there are property tax exemptions based on age, and exemptions for veterans and veterans' widows, disabled veterans, prisoners of war, Gold Star parents, and homeowners who are blind or handicapped. The Rhode Island Department of Revenue provides a summary of the veterans' and elderly tax exemptions based on a survey of the 39 cities and towns in Rhode Island. To claim an exemption you should contact your town or city tax assessor.

There is also a state-wide property tax relief program in Rhode Island in the form of a tax credit. As indicated by the Providence Journal, many people do not realize they are eligible and do not apply for this credit. You are eligible if you have been a legal resident of Rhode Island the entire year, you owned or rented a dwelling that was subject to property taxes, you are current on your property tax or rent payments, and your household income is $30,000 or less.

To claim the property tax credit you should file Form RI-1040H, Rhode Island Property Tax Relief Claim. If you file a Rhode Island state income tax return, attach the form to your tax return and the credit will be applied against the income tax you owe or will increase the amount of the refund you receive. If you are not required to file a state income tax return, you can file Form RI-1040H separately to claim the refund. You must file your claim by April 15.

The amount of the credit is based on the property taxes you paid if you own your home, or the property taxes included in your rent (20% of your rent for purposes of calculating the credit). This amount is multiplied by a percentage based on your income level to determine the credit. The maximum amount of the property tax credit is $300.

Sources:

Exemptions by Definition, City of Providence Tax Assessor

Form RI-1040H, Rhode Island Property Tax Relief Claim, Rhode Island Department of Revenue

Municipal Tax Rates, Rhode Island Department of Revenue

Property Taxes on Owner-Occupied Housing by State, 2004-2009, Tax Foundation

Some people don't realize they're eligible for property-tax relief, The Providence Journal

Tax Assessor's Frequently Asked Questions, City of Pawtucket Tax Assessor's Office