After the fallout of the 2017 Tax Cuts and Jobs Act, a number of New York City residents are looking to move to Miami for its sunny climate and cheaper taxes.
The law, which will be applied to 2018 tax returns, limits the deductions taxpayers can pay on property taxes and state and local taxes up to $10,000.
New York state’s income tax rate is 8.82 percent, while Manhattan’s is 3.876 percent. Nearly half of New York City’s taxpayers have taken an average deduction of $60,000 a year, as reported by the New York Times.
Miami-based financial advisor David Gruen calculated that a New Yorker earning $2 million per year will save as much as $288k per year by moving to Miami, as stated by the David Siddons Group.
Additionally, he found that a New York resident with $10 million in ordinary income and a $10 million home would save $1,173,278 in total taxes by relocating to Florida on Jan. 1, 2018, when the law took effect.
As a result, there’s an increase of $431,682 or 58 percent from 2017, according to the Tax Institute at H&R Block.
Dora Puig, the top-ranked real estate broker in Miami-Dade County by sales volume, said in an email, “Since the tax reform passed, the top of the market has sped up in terms of closed sales. There have been quite a few record sales north of $10 million.”
When describing the typical New York buyer of Miami properties, she emphasized, “This type of buyer is purchasing anywhere from $10 million up to $50 million.”
Conservative economists Arthur Laffer and Stephen Moore of Laffer Associates and the Heritage Foundation predicted to the Wall Street Journal that New York and California alone would lose 800,000 to tax-related migration over three years.
Crain’s recently reported that Cristobal Young, a Cornell University sociologist found that Florida is the most successful of the zero income tax states at attracting millionaire migration.
Reports indicate that especially in recent months, there have been a number of developers constructing luxury residential buildings that cater to a Manhattan buyer.
