Rhode Island recently revived a bold proposal nicknamed the “Taylor Swift Tax,” targeting luxury second homes valued over $1 million that aren’t primary residences. Under this plan, owners would pay an extra $2.50 for every $500 of assessed value above that threshold. For celebrities like Taylor Swift, who own multiple homes, this could mean an additional $100,000 or more in property taxes annually.
But this isn’t just about the rich and famous. It’s a reflection of a growing regional backlash against vacant homes, absentee owners, and the widening gap between housing supply and affordability.
Nowhere is this tension more visible than in Maine. Over 157,000 homes—more than 21% of the state’s housing stock—sit vacant, the highest vacancy rate in the country. As Maine struggles with a housing shortage, an aging population, and rising property taxes, many are beginning to wonder: Will Maine be next to implement a second-home tax?
Maine has long been a haven for second-home buyers. A 2019 study ranked it number one nationwide for the share of housing classified as vacation or second homes. The COVID-19 pandemic only accelerated this trend, with wealthy buyers and remote workers snapping up coastal and lakeside properties. By 2023, counties like York and Cumberland saw some of the fastest-growing second-home sales in the nation.
But recently, signs of change are emerging. In the first quarter of 2025, active listings for Maine homes jumped by 27% on Realtor.com®, with some vacation towns like Kennebunk, Windham, Naples, and Scarborough seeing new listings triple month-over-month. Many of these are seasonal or second homes.
Despite the increase in supply, affordability remains out of reach for many locals. Prices in York and Cumberland counties remain well above pre-pandemic levels, keeping many homes financially out of reach. This growing gap has sparked debate: Should vacation homes be taxed differently than primary residences? For full-time residents who compete for housing and face rising tax bills, the argument is clear—if second homes drive up prices and stretch local resources, shouldn’t they pay a bigger share of taxes?
Take Marianne, a retired teacher in Cumberland County living on a fixed pension. Her property taxes rise year after year, straining her modest income. Meanwhile, just miles away, a luxury waterfront home sits mostly empty, owned by a New York investor. Stories like hers illustrate the challenges faced by many Maine seniors who want to stay in their communities but are squeezed by the housing market and taxes.
Rhode Island’s “Taylor Swift Tax” isn’t the only attempt to tackle this issue. Montana recently passed a sweeping tax reform lowering property taxes for full-time residents while raising rates on second-home owners and industrial landholders. Owner-occupied homes there now pay a reduced rate, while vacation and short-term rental properties face significantly higher taxes. Though politically contentious, the move has saved an estimated 230,000 Montanans money on their property taxes.
These two states showcase contrasting approaches—one more symbolic and targeted, the other broader and systemic. Maine could learn from both as it grapples with similar challenges.
Maine’s aging population may be the catalyst pushing tax reform forward. A proposal currently under review, LD 1541, would eliminate property taxes for residents over 65 who have lived in the state for at least ten years. Supporters say it’s vital relief for seniors at risk of losing their homes due to soaring taxes.
But the financial consequences are significant. Nearly one in four Mainers is over 65, and exempting so many from property taxes could leave local governments scrambling for revenue. Past efforts along these lines were repealed within a year because of unsustainable costs. Younger residents worry they will face higher tax bills, especially in tourist-driven towns where property values—and tax assessments—continue to climb.
Across New England, attitudes toward property taxes are shifting. Rhode Island is pushing the envelope with its luxury second-home tax, while Vermont is quietly revising property classifications to pave the way for future targeted taxation.
Maine hasn’t followed suit—yet. But with vacancy rates at historic highs and affordability slipping further from reach, the pressure to act is mounting. If senior tax exemptions become law, rebalancing the tax base may accelerate this shift.
New England’s picture-perfect vacation homes might soon come with a much steeper price tag, especially when they’re empty most of the year.
For residents like Marianne, who have long called these communities home, these changes could provide much-needed relief. For wealthy second-home owners, it signals a new reality: owning a vacation property is becoming more costly—and states are recalibrating who pays their fair share.
The question now facing Maine and its neighbors is simple but profound: In a housing market strained by demand and divided by age and wealth, who should bear the cost of local services?