Taylor Swift attends the 67th GRAMMY Awards on February 02, 2025 in Los Angeles, California.Frazer Harrison | Getty Images Entertainment | Getty ImagesA version of this article appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.A new push by states to tax the real estate of the wealthy has sparked a backlash among brokers and potential buyers, who say the taxes punish the most important local spenders.From tax hikes on pricey second homes in Rhode Island and Montana to Cape Cod’s proposed transfer tax on homes over $2 million and the L.A. mansion tax, state and local governments see a revenue gold mine in the pricey properties of the wealthy.”It’s a smack in the face to people who just spend money here,” said Donna Krueger-Simmons, sales agent with Mott & Chace Sotheby’s International in Watch Hill, Rhode Island.The tax hikes are being driven by tighter state budgets and populist anger over housing costs. States are looking to offset budget cuts expected from the new tax and spending bill in Washington. At the same time, the housing market has become a tale of two buyers, with the middle class and younger families struggling to afford homes while the luxury housing market thrives from wealthy all-cash buyers.The solution for many states: tax the homes of the rich.Get Inside Wealth directly to your inboxThe Inside Wealth newsletter by Robert Frank is your weekly guide to high-net-worth investors and the industries that serve them.Subscribe here to get access today. Rhode Island’s new levy, nicknamed “The Taylor Swift Tax,” is among the most extreme. The popstar bought a beach house in the state’s elite Watch Hill community in 2013.The measure imposes a new surcharge on second homes valued at more than $1 million. For non-primary residences, or those not occupied for more than 182 days a year, the state will charge $2.50 for every $500 in assessed value above the first $1 million. That charge is on top of existing property taxes and will add up to big increases for luxury homes …
