Here’s why it’s tough to flee high-tax states

The process can be more trouble than it’s worth

TRD New York /
Jul.July 24, 2018 11:30 AM

Auditors peering into homes (Credit: iStock)

People trying to flee steep taxes may find themselves stuck.

High-tax states like New York make it difficult to leave, using aggressive methods to see whether people have really severed ties with their former homes, Bloomberg reported. In New York, the Department of Taxation can issue subpoenas to go through credit card statements and bank records. It may even send auditors to confirm appointments or interview doormen, the report said.

Additionally, former New Yorkers who hold on to their old homes will have to prove that they haven’t spent more than 183 days in the state.

According to wealth managers and tax lawyers, those tactics are making many clients stay put. In the past 12 months through May, the number of net change-of-address forms filed with the postal service for people moving to Florida from New York, New Jersey and Connecticut has declined from recent highs, the report said.

“When people understand they have to change their life circumstances, some people say: ‘Never mind, that’s too big a life change for us to do right now,”’ Timothy Noonan, a partner at law firm Hodgson Russ LLP, told Bloomberg.

But there are exceptions. For the super-rich, the hefty tax savings might still be worth it. Hedge fund executives like David Tepper and Paul Tudor Jones have moved to Florida, the report said. Some money managers plan to relocate this year after the new $10,000 limit of state and local tax deductions.

The states most affected — New York, New Jersey, Connecticut and Maryland — filed a suit against the Trump administration, claiming the cap unfairly targets them. [Bloomberg] — Meenal Vamburkar


Related Articles

arrow_forward_ios
Keeping lawns freshly cut and outdoor spaces in tip-top shape could result in greater rewards for sellers. (Credit: iStock, IMDB)

Curb your enthusiasm: Homes with spruced-up outsides sell at premium

Elsa Segura (left) was arrested in connection to realtor Monique Baugh's (right) murder (Credit: iStock)

Second suspect charged in real estate agent’s abduction, murder

Clockwise from top left: John Gomes, Ronita Kalra, Eric Beniam and McKenzie Ryan (Credit: Getty Images, iStock, Wikipedia)

“We’re putting ourselves in situations where anything is possible”: Real estate agent’s killing rattles industry

State Sen. Julia Salazar and Assembly member Harvey Epstein proposed the tax this month in an effort to disincentivize real estate speculation (Credit: iStock, Getty Images)

Experts take issue with proposed tax on mezzanine loans

As the years go by_A look back at 17 years of real estate history

A look back at 17 years of real estate history

157 West 57th Street (Credit: iStock)

One57 condo with reduced ask tops a slow week of luxury contracts

Clockwise from top left: 730 Fifth Avenue, Unit #PH21; 730 Fifth Avenue, Unit #18A; The Pierre, Unit #3101; and The Park Imperial, Unit #64

Priciest homes listed last week include $60M pad at Crown Building

State Senator Julia Salazar and Assemblymember Harvey Epstein (Credit: Getty Images)

Pols take aim at private equity with plan to tax mezz debt

arrow_forward_ios
Loading...