New Yorkers are moving to low-tax states like Florida or seeking out properties with tax abatements in order to mitigate the impact of President Trump’s tax reform.
“I work with a lot of clients in New York, Connecticut and New Jersey — so all high-tax states — and we are seeing a lot of them move south, especially to Florida,” Robert Westley, a certified public accountant based in New York City, told the New York Times. “With almost all of our clients it comes up, and I would say about half of them are really looking into it.”
Trump’s legislation limits deductions on state and local taxes to $10,000. Roughly half of Manhattan’s taxpayers deducted state and local taxes in the past, with the average deduction at more than $60,000, according to the Times.
Florida’s housing market has been on the up since the law was put into place. Sales of single-family homes priced at $2 million and above in Naples, for example, saw an increase of 25 percent during the second quarter of 2018 from a year earlier, according to the Naples Area Board of Realtors.
And while it’s difficult to prove the bump is a direct result of homebuyers fleeing high-tax states, industry players believe it’s playing a role.
“I have about 10 clients, including three from New York, who are fleeing high-tax states,” said Niklas Ahola, a broker for Compass in Naples.
Some buyers are instead targeting buildings in New York City with tax abatements. Rebecca Miller and her husband bought a two-bedroom unit at 550 Vanderbilt, which has a 25-year abatement.
“It was a huge factor in our decision to buy here,” said Miller, who pointed out that taxes on the unit are about $42 per month, compared to roughly $1,500 per month without the abatement. [NYT] – Rich Bockmann