The bill proposes an amendment to Chapter 44-5 of the General Laws, specifically adding a new section that would allow municipalities to establish a homestead exemption for local taxation on residential real property. The new section, 44-5-89, would enable municipalities to grant an exemption of up to twenty percent (20%) of the assessed value of a property used exclusively for residential purposes and containing less than four units. The municipality would be responsible for setting the eligibility rules and regulations for the exemption.

Additionally, the bill addresses situations where a property that has been granted a homestead exemption is sold or transferred within the year. It allows municipalities to prorate the exemption based on whether the new owner is entitled to claim it. Furthermore, if a municipality had already established a homestead exemption at a different or higher rate prior to the enactment of this section, it would be exempt from the limitations imposed by subsection (a). The act would take effect immediately upon passage. There are no deletions mentioned in the provided text.