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New Yorkers Fleeing the Tri-State Area in Favor of Lower Tax Options, like Florida.

July 16, 2018

States like Florida and Texas have been wooing businesses and wealthy residents with promise of warm weather, zero state income tax and relatively low property taxes for years. It looks like their time has finally come as the states are drawing a wave of Wall Street investors, real estate executives and other wealthy residents from New York and the tri-state area.

The boost for states like Florida and Texas can be traced back to the Tax Cuts and Jobs Act, which was enacted last December. Before the Act was passed, taxpayers were previously allowed to write off all of their property taxes by deducting the lion’s share of their state and local taxes from their federal tax bill.  After the Act passed, however, those so-called “SALT deductions” are now capped at just $10,000.

Colby Gaines, a producer of the reality TV show “Pawn Stars,” noted that he could save approximately $500,000 a year in taxes by moving from New Jersey back to his native Texas. In May, Gaines and his wife paid just over $4 million for a Spanish-style house in an upscale neighborhood in Austin, and listed their in Westfield, New Jersey, for $6.95 million.

In mid-June, Douglas Elliman agent Oren Alexander said the Miami market had more action in the prior 45 days than it did in the previous two years. “I think the amount of activity we’ve seen is also just beginning,” he said. He believes that in April, when everyone cut 2017 tax checks to the IRS, they realized how much money they could save by living in Florida. While there is currently not a widespread mass exodus, the already hot New York-to-Miami corridor seems to be stronger than ever.

Source: The Real Deal

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