It may be the weather that first attracts people to Florida, but it’s often the tax advantages to moving here that help to seal the deal. In fact, Florida as a state is ranked with one of the lowest tax burdens in the nation – just behind Wyoming, South Dakota, and Alaska.
I want to help you uncover and understand what benefits you can gain by claiming residency here.
No State Income Tax
Let’s begin with the fact that Florida does not have a state income tax – one of only seven states in the US that can say this. And what’s more, there is no change expected, as this policy has been written directly into the state’s constitution. Instead, Florida’s income is generated from sales tax and excise taxes.
As a comparison, those who live in New York City, add about 13 percent to your tax bill for state and city taxes. For New Yorkers earning $1 million per year, moving to Florida means saving $130,000 per year.
No State Inheritance Tax
Florida does not collect a state inheritance tax – also known as an estate tax. An estate tax is a tax on property (cash, real estate, stock, or other assets) transferred from a deceased person to his or her heirs. Assets are only subject to the federal tax – which allows for the exemption of $5.85 million for U.S. citizens and primary residents.
Benefits for retirees
Any money you receive from Individual Retirement Accounts, 401(k)s, private and public pensions, and Social Security, is completely free of in-state taxation. With regard to Social Security benefits, Florida is one of 37 states that currently does not collect a tax on them.
Protecting your home
Along those lines, Florida protects its residents from losing their homes to creditors other than mortgage holders.
Homestead
Florida provides generous homestead laws for property owners – which means you can deduct the first $50,000 of the property value of your primary residence. And homeowners are now constitutionally protected against what you could call “runaway property appreciation” with Florida’s “Save our Homes” cap on annual assessments. Assessed property value can grow no more than 3% in any given year or the change in the consumer price index, whichever is less.
If you want to learn about moving to Florida and the benefits of living here, then please contact me. I look forward to helping you discover Manatee or Sarasota real estate.