Northerners That Are Taxed To The Hilt Migrate To To Florida
Taxed to the hilt, more northern homebuyers are migrating to Florida
ByDAVID LYONS|SOUTH FLORIDA SUN SENTINEL|JUN 24, 2019|6:00 AM
Fed up with the high taxes and regulation back home in New York, retired officer Thomas Maloney and his wife, real estate agent Theresa Hart, are looking to offload a home in Long Island — quickly.
“It’s been a thorn in my side for the past seven years,” Maloney said. Between regulations that favor tenants and rising city and state taxes, they say they’re “just not comfortable" being landlords in New York.
The Palm Beach County couple’s story reflects a growing mood among high earners from the Northeast that it’s time to cash in their real-estate chips in high-tax states and move to places like Florida, where the tax bites are less and it’s cheaper to buy and maintain a home.
The Sunshine State always has been a favorite of transplants for its weather, beaches and lack of a personal income tax. And while little data is available to quantify the level of tax migration from the north, real estate agents and economic development promoters say that their client lists are burgeoning with out-of-state residents looking to sign contracts.
A bump in activity started with the federal tax overhaul in 2017. Although rates were cut for corporations and individuals, the ability of residents to deduct state, city and property taxes from their federal returns in places like New York, New Jersey and Connecticut was diminished. Other heightened tax obligations are kicking in as well. As of July 1, a three-decades-old “mansion tax” in New York State is being boosted in New York City to help pay for improvements to the city’s creaky subway system.
Upward reassessments also are taking their toll, according to Maloney. He said he has a brother whose annual property tax bill more than doubled from $12,000 on his home in Staten Island.
Drawing more people
It’s all to the advantage of Florida’s economy and its real estate industry, brokers and developers say. Some tax refugees are moving not only themselves, but their businesses to Florida, or setting up branch offices here.
Theresa Hart, who works for Florida Premier Realty, said she thinks Palm Beach County “is the next hot spot for out-of-state investors.”
“Any time you tax something, you’ll sell less,” said Josh Dotoli, of Compass Florida in Fort Lauderdale. “The idea of increasing the mansion tax is going to slow down an already sluggish [New York] real estate market. The impact on South Florida will be positive for sure.”
Some northern states say they’re feeling the pain. New Jersey reported a 35 percent decline in income-tax revenue for December 2018, according to the Wall Street Journal, and blamed the drop on tax policy. And New York Gov. Andrew Cuomo complained in February that the policy change was a “diabolical maneuver” to help red states "at the cost of blue states.”