NEW YORK – Feb. 5, 2019 – The massive tax reform package signed in December 2017 changed things. With a new state and local tax cap of $10,000, high-income homeowners in high-tax states such as New York found themselves facing a notably bigger tax burden than they once did.
However, that makes low-tax states, such as Florida, more attractive.
New York Gov. Mario Cuomo is now facing a $2.3 billion budget deficit that he says, in part, is due to an exodus of homeowners seeking a better tax picture – and he specifically noted that many New Yorkers unhappy with the new tax laws are moving to South Florida.
The Wall Street Journal, citing a Zillow study, says “preliminary data show a jump in Florida home purchases by buyers from high-tax states,” and that “home values in lower-tax areas have been rising faster than those in places where limiting the ability to deduct high state and local taxes eroded some of the savings from the federal tax reduction.”
Jonathan Miller, a real estate appraiser who focuses on the South Florida market, says he’s “starting to see New Yorkers as Florida’s new foreign buyer. … If they were already on the fence, I think the tax law has changed the calculus for some.”
According to July 2017-2019 Census data, Florida had the nation’s highest level of net domestic migration, while New York lost the most residents.
Source: The Wall Street Journal, Laura Kusisto, Arian Campo-Flores and Jimmy Vielkind