cawacko
Well-known member
I know we have a number of Florida posters on this board. There's always going to be people moving to and from every state. Nothing is static. But have you noticed a bigger influx recently (or has it been discussed more in local papers/news) than in the past?
In Florida, Homeowners Come for the Weather and Stay for the Tax Relief
Wealthy property owners are fleeing high-tax states like New York, New Jersey, and Connecticut for the Sunshine State, which has no state income or estate tax
There’s a way for rich homeowners to potentially shave tens of thousands of dollars from their tax bills. They can get that same savings the next year and the following years as well. They can cut their taxes even further after they die. What’s the secret?
Moving to Florida, a state with no income tax or estate tax.
Plenty of millionaires and billionaires have been happy to ditch high-tax states like New York, New Jersey, Connecticut and California. President Donald Trump and Carl Icahn both announced in the fall that they’ll be making Florida their primary residence, joining other high-profile executives like financiers Barry Sternlicht, Eddie Lampert and Paul Tudor Jones.
A New York couple filing jointly with $5 million in taxable income would save $394,931 in state income taxes by moving to Florida, according to Taryn Goldstein, head of Florida’s state and local tax practice for BDO USA, an accounting firm that provides tax services and financial advice. If they had moved from Boston, they’d save $252,500; from Greenwich, Conn., they’d knock $342,700 off their tax bill.
“I have to admit that I was surprised by how much of a financial savings” is achieved by moving to Florida. “It is crazy money,” says Connor Lynch, chief executive of Plastridge Insurance Agency based in Delray Beach, Fla.
Escaping state income taxes is a big part of the reason, but the federal Tax Cuts and Jobs Act of 2017 also plays a role. The law limits deductions on state and local taxes as well as the mortgage-interest deduction on federal tax returns. Factor in Florida’s lower cost of living relative to high-tax states, and the decision to move gets even easier.
“The rich want to stay rich,” says Dina Goldentayer, executive director of sales at Douglas Elliman Real Estate. In South Florida alone, the brokerage saw a 30% increase in total sales volume from 2017 to 2018. She is currently listing a five bedroom, 5½-bathroom property on the Venetian Islands, asking $21 million for the 8,665-square-foot home.
Ms. Goldentayer recently sold an $11 million oceanfront penthouse to a Wall Street financier who is moving his family to Florida to reduce the tax hit.
“Municipal taxes, local taxes, play a big role in the decision, more so than the mortgage [interest] deduction,” Ms. Goldentayer notes.
Luxury markets across Florida, defined as the top 10% of listings, have performed better than most luxury markets across the country this year, says George Ratiu, a senior economist with Realtor.com. In November, the average price of a luxury listing was $1,649,380, up 8.6% from the same period in 2018. ( News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.)
Among the seven U.S. states with no income tax and no tax on dividends and interest, Florida accounted for 45% of home sales in 2019 through November. Texas came in second, accounting for 33.6% of home sales, Mr. Ratiu says.
Where you relocate in Florida also packs financial repercussions. The median listing price in Monroe County’s luxury market, which includes the Florida Keys, is $2.875 million. In Miami-Dade, the median list price is $2.09 million. But the median in Orange County, which includes Orlando, is $935,000, according to Realtor.com.
One thing transplants should expect to pay more for is homeowner’s insurance, says Mr. Lynch, the insurance executive. A policy on a house valued at $2 million can range from about $11,000 to $20,000 a year to cover the replacement value, he estimates. He notes that homeowners in certain areas should also purchase hurricane and flood insurance—coverage that is not typically included in a standard policy.
Multimillionaires aren’t just moving their families south, they are taking their businesses with them, says Kelly Smallridge, president and CEO of the Business Development Board of Palm Beach County. “We’ve brought in well over 70 financial-services firms” in the past few years, she says. “The higher the taxes, the more our phone rings.”
The development board helps the business executives find office space, typically 5,000 to 7,000 square feet, for anywhere from five to 50 employees. Board members also take the executives on residential tours, coordinating introductions with mayors, private-school headmasters, country clubs and places of worship in desired areas. Finally, they guide them through the process of making Florida their legal domicile.
“We are not doing this quietly,” Ms. Smallridge says, noting that the board actively recruits business leaders living in places like Greenwich, Conn., Manhattan and Boston.
https://www.wsj.com/articles/in-flo...-the-tax-relief-11578501325?mod=hp_major_pos6
In Florida, Homeowners Come for the Weather and Stay for the Tax Relief
Wealthy property owners are fleeing high-tax states like New York, New Jersey, and Connecticut for the Sunshine State, which has no state income or estate tax
There’s a way for rich homeowners to potentially shave tens of thousands of dollars from their tax bills. They can get that same savings the next year and the following years as well. They can cut their taxes even further after they die. What’s the secret?
Moving to Florida, a state with no income tax or estate tax.
Plenty of millionaires and billionaires have been happy to ditch high-tax states like New York, New Jersey, Connecticut and California. President Donald Trump and Carl Icahn both announced in the fall that they’ll be making Florida their primary residence, joining other high-profile executives like financiers Barry Sternlicht, Eddie Lampert and Paul Tudor Jones.
A New York couple filing jointly with $5 million in taxable income would save $394,931 in state income taxes by moving to Florida, according to Taryn Goldstein, head of Florida’s state and local tax practice for BDO USA, an accounting firm that provides tax services and financial advice. If they had moved from Boston, they’d save $252,500; from Greenwich, Conn., they’d knock $342,700 off their tax bill.
“I have to admit that I was surprised by how much of a financial savings” is achieved by moving to Florida. “It is crazy money,” says Connor Lynch, chief executive of Plastridge Insurance Agency based in Delray Beach, Fla.
Escaping state income taxes is a big part of the reason, but the federal Tax Cuts and Jobs Act of 2017 also plays a role. The law limits deductions on state and local taxes as well as the mortgage-interest deduction on federal tax returns. Factor in Florida’s lower cost of living relative to high-tax states, and the decision to move gets even easier.
“The rich want to stay rich,” says Dina Goldentayer, executive director of sales at Douglas Elliman Real Estate. In South Florida alone, the brokerage saw a 30% increase in total sales volume from 2017 to 2018. She is currently listing a five bedroom, 5½-bathroom property on the Venetian Islands, asking $21 million for the 8,665-square-foot home.
Ms. Goldentayer recently sold an $11 million oceanfront penthouse to a Wall Street financier who is moving his family to Florida to reduce the tax hit.
“Municipal taxes, local taxes, play a big role in the decision, more so than the mortgage [interest] deduction,” Ms. Goldentayer notes.
Luxury markets across Florida, defined as the top 10% of listings, have performed better than most luxury markets across the country this year, says George Ratiu, a senior economist with Realtor.com. In November, the average price of a luxury listing was $1,649,380, up 8.6% from the same period in 2018. ( News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.)
Among the seven U.S. states with no income tax and no tax on dividends and interest, Florida accounted for 45% of home sales in 2019 through November. Texas came in second, accounting for 33.6% of home sales, Mr. Ratiu says.
Where you relocate in Florida also packs financial repercussions. The median listing price in Monroe County’s luxury market, which includes the Florida Keys, is $2.875 million. In Miami-Dade, the median list price is $2.09 million. But the median in Orange County, which includes Orlando, is $935,000, according to Realtor.com.
One thing transplants should expect to pay more for is homeowner’s insurance, says Mr. Lynch, the insurance executive. A policy on a house valued at $2 million can range from about $11,000 to $20,000 a year to cover the replacement value, he estimates. He notes that homeowners in certain areas should also purchase hurricane and flood insurance—coverage that is not typically included in a standard policy.
Multimillionaires aren’t just moving their families south, they are taking their businesses with them, says Kelly Smallridge, president and CEO of the Business Development Board of Palm Beach County. “We’ve brought in well over 70 financial-services firms” in the past few years, she says. “The higher the taxes, the more our phone rings.”
The development board helps the business executives find office space, typically 5,000 to 7,000 square feet, for anywhere from five to 50 employees. Board members also take the executives on residential tours, coordinating introductions with mayors, private-school headmasters, country clubs and places of worship in desired areas. Finally, they guide them through the process of making Florida their legal domicile.
“We are not doing this quietly,” Ms. Smallridge says, noting that the board actively recruits business leaders living in places like Greenwich, Conn., Manhattan and Boston.
https://www.wsj.com/articles/in-flo...-the-tax-relief-11578501325?mod=hp_major_pos6
