Providence Homestead Exemption Needs Your Support

  I have been attending many holiday gatherings lately and the most popular question asked of me on the East Side of Providence is “What is happening with the homestead exemption?” The current residential property tax rate is $31.89 on every $1,000 of assessed value.  Homeowners  in Providence receive a 50% owner occupied homestead exemption at his or her principal address if the homeowner proves they reside in the home. Legislation passed by the City Council last year requires all Providence homeowners to reapply for the exemption. The ordinance also requires residents to register their vehicle at the same address. To claim the homestead exemption, homeowners must provide a vehicle registration AND a copy of a Rhode Island driver's license with that address OR a homeowner's insurance policy OR an automobile insurance policy. There can be a lag in receiving this exemption, because the Tax Assessor’s office updates the status of houses   once a year (on December 31) for tax bills that are issued the following July.  As a result, an eligible homeowner may pay taxes for a year or more at a higher rate before receiving the benefit of the  exemption  and, conversely, someone who is not eligible for the exemption  may receive it for a year or more because of the same lag.  There are challenges in resolving this issue.  The Tax Assessor’s office has indicated that it lacks the staff to adjust the tax rolls continuously, and there is a concern that offering a full rebate to new homeowners without collecting from the non-exempt  will cause a major revenue shortfall. We feel that it is unfair to people buying houses from investors who plan on living in them   and often the tax burden is a  hindrance  to the sale of those properties. In November many agents from our office attended a Providence City Council meeting and presented our case for improving the homestead situation. At the present time, the Ways and Means Committee is vetting the proposal and we have yet to hear any word on it. This Week’s Real Estate Insight: As the ordinance stands now, if someone buys a property in Providence from an investor and plans to live in it, they cannot claim the homestead exemption until the next calendar year.   We at RPL proposed the same policy that they extended to distressed properties and eliminate the waiting period. If you live in Providence, please call or write your council members and the Mayor to let them know how you feel about the inequity in the homestead exemption.