Luxury real estate specialist Katrina Campins offers insights into many people moving to South Florida amid the coronavirus pandemic and their time at ‘The Apprentice’.
I haven’t given up on New York City, but the downsides outweighed the benefits of staying in the city full-time when COVID hit 2020. I still consider myself a New Yorker even though I live in the sixth district, Palm, Beach.
I’ve kept the New York attitude, work ethic, and get-done attitude, which is very good for me in Florida, where many people are more relaxed about their careers.
Do I think the city will come back? – YES. In time. However, a flexible work schedule enables me to be productive anywhere.
So I chose a place where I can live in a completely normal way in these unprecedented times. A home where we can visit restaurants (indoor and outdoor), bars and small businesses, play sports, attend personal schools and enjoy events. A place where safety is a top priority. In fact, we offer everyone (and everyone who makes an appointment) extensive (and free!) COVID rapid tests.
Retirement and what people want before they moved to Florida
My New Yorkers are also making tracks south. Florida, with a population of over 1,000 a day, is attracting new residents while states like New York, New Jersey and Connecticut are contracting out, creating budget shortages.
In 2019, Florida attracted $ 17.2 billion more than it lost, as the recipient of a “wealth exodus” from many states, including New York, which added around $ 8 billion to Florida’s income base. And we achieved that budget surplus without the additional state income tax that burdens so many people in the north.
After experiencing the decisions associated with moving, I saw an opportunity to guide others through the process. As a real estate agent at Nest Seekers International in New York and Palm Beach, I specialize in helping clients move south and offering a white glove service to buyers and sellers who want to make the transition as smooth as possible.
If you’re on the fence, there are a few more reasons Florida is appealing right now:
1. Florida residents do not pay state and city income taxes
A Florida resident pays no state income tax. Instead, Florida’s income is generated from sales tax and excise taxes. However, living in New York City increases your state and city tax burden by about 13 percent. For New Yorkers making $ 1 million a year, that translates into a $ 130,000 annual savings.
2. New tax law favors low-tax countries
Florida has always been a bargain when it comes to taxes, but now it’s even cheaper compared to other high-tax countries negatively impacted by the Tax Cuts and Jobs Act (TCJA). The previous tax law provided for the deduction of state income tax and municipal taxes (e.g. real estate taxes on a main residence) for the purpose of federal tax.
Almost overnight, the new tax law made it very expensive to have a primary residence in New York. Under the new tax law, the amount of state and local tax (SALT) deductible for federal tax purposes was capped at $ 10,000.
For a New Yorker who makes $ 1 million per year and owns a condo with $ 2,000 per month property tax, that New Yorker loses not only the $ 130,000 federal income tax deduction, but the deduction as well of $ 24,000 in property tax. Legal deduction of $ 10,000. In this scenario, a $ 144,000 deduction was lost due to the tax change.
Of course, not everyone makes $ 1 million a year, but for nearly half of Manhattan taxpayers who have taken the SALT deductions in the past, the average deduction was over $ 60,000.
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The TJCA also reduced the deductibility of mortgage interest on primary homes from $ 1 million to $ 750,000 for federal tax purposes. This only applies to new mortgages. This change also makes it more expensive to own a primary home across the country, assuming you can buy a home for $ 1 million. In Manhattan, you’re lucky enough to buy a one-bedroom apartment for $ 1 million, but around Palm Beach you can find a great three-bedroom apartment in a luxury building.
3. No Florida capital gains tax
Florida has no income tax for citizens and therefore no capital gains tax for individuals. In contrast, New York City and the state generate capital gains at normal income rates, similar to most other states.
While moving from New York to Florida may seem easy, the New York State tax authorities are not making it easy to move out of residence. Under New York tax law, an individual resident outside of New York will continue to be considered a “legal residence” in New York if they (a) have “permanent residence” in New York for substantially all of the tax year and ( b) Spends 183 days or more in New York during the tax year.
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It’s not that you can just register to vote in Florida or get a Florida driver’s license and get permanent residency in the Sunshine State. New York State will check almost everyone who moves to Florida. So it is important to follow the rules.
4. No estate tax in Florida
Florida does not have its own estate tax, meaning assets are only subject to federal tax. An inheritance tax, sometimes called a “death tax,” is a tax on property (cash, real estate, stocks, or other assets) that a deceased person transfers to their heirs. The federal estate tax law provides for the $ 5.85 million exemption for U.S. citizens and primary residents.
In contrast, both New York City and the state have an estate tax. When a resident dies, city and state property is subject to city and state estate taxes. Estate tax rates in New York range from 3 to 16 percent. However, both the city and state reflect federal regulations and exclude the first $ 5.85 million for U.S. citizens and major residents.
5. Easier bankruptcy laws than many other states.
Florida has a homestead exemption that allows a permanent primary residence to be protected from creditors for as long as the debtor has lived in Florida for 40 months. This is very different from many other states.
While bankruptcy law is likely not a primary reason people move to Palm Beach from NYC, Florida could be a permanent option for someone at risk of a lawsuit that could potentially bank them (if they lose the lawsuit).
I just say ‘.
6. Lifestyle and Weather
Florida’s lifestyle is hard to beat. Moving from NYC to Palm Beach can add another dimension to your life that you won’t find in New York in year-round warm weather. This often translates into a more active outdoor lifestyle, whether you enjoy beaches, water sports, running, tennis, golf, and even just hiking year-round.
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Hand in hand with population growth, Palm Beach serves as a cultural center for arts and philanthropy, including the Norton Art Museum, the Society of the Four Arts, the Kravis Center, and regular galas and events.
That said, nothing is perfect … and there are a few more things I get used to: frizzy hair, driving to 95 (honestly, I’d rather drive through NYC Midtown on a Friday at 5pm than to Miami), men wearing Shorts for dinner and trying to get my steps away from the hustle and bustle of the city.
Erin Sykes is a consumer and real estate analyst and chief economist at Nest Seeker’s International. She began her career at Estee Lauder, worked extensively in international markets, particularly in Asia and Latin America, and later became Vice President of Sykes Commercial Development. Today she focuses on selling luxury homes between Palm Beach, New York and The Hamptons. Follow Erin @sykesstyle on social media.