Taxes

States target second homes, luxury real estate for new tax revenue

Montana, New Jersey and Rhode Island enacted laws this year.
Lone Peak, which rises above the resort community of Big Sky, Montana, on Jan. 31, 2021. (AP Photo/Matthew Brown)

Lawmakers in at least three states this year raised taxes on pricey real estate or second homes, as luxury assets have become a tempting target for both Republicans and Democrats seeking new revenue to help fund their policy priorities

Montana lawmakers hiked property taxes on second homes and short-term rentals to help fund property tax cuts for full-time state residents. New Jersey lawmakers raised taxes on the sale of residential and some commercial properties worth more than $2 million to help balance the budget. And Rhode Island lawmakers approved a tax on second homes worth more than $1 million to fund low-income housing projects. 

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