Buying first property in Rhode Island

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Hi! What are the tax implications for owning a property in RI and living elsewhere in MA? Example: someone wants to purchase a multi family, house hack for a year on FHA, and then move closer to Boston, are there heavy tax implications? If so, please share. Thank you. I’m torn between buying in Worcester and Pawtucket RI. Both the same commute time from work!

@Tijana Flowers-Harris this is certainly a question for your accountant/CPA, but to my knowledge there are no special tax implications for you when you buy or while you own the property.

However when you go to sell, if you aren't a resident of RI you may face non-resident withholding of part of the sale proceeds (see Withholding on Sale of Real Property by Nonresidents and/or the non-resident withholding law itself).

Also, you should be aware that apart from tax considerations there may be legal considerations for owning property in RI if you live in Mass.

For example, you may also need to register as an out of state landlord with the RI secretary of state and possibly the city of Pawtucket as well.

So you'd want to ask your attorney about those and any other one-time and ongoing requirements for owning property in RI if you live out of state.

This will all depend on your particular tax situation.  Impossible to tell without knowing more detailed information.  A CPA is 100% the person to give you a specific answer on that and iron out the best way to strategically execute.