Florida resi brokers, developers chase New York buyers affected by new tax law

But is the millionaire "migration" really happening?

Jan.January 11, 2019 10:30 AM

The new federal tax law, which came into effect on January 1, limits deductions for state and local taxes, including property taxes, to $10,000. (Credit: iStock)

Sunshine and low taxes.

That’s what residential brokers and condominium developers in Florida are offering homebuyers looking to escape high-property-tax states like New York, New Jersey and Connecticut.

The new federal tax law, which came into effect on January 1, limits deductions for state and local taxes, including property taxes, to $10,000.

A report by Bloomberg found that under the new law, a New Yorker with $10 million in ordinary income and a $10 million home could have saved about $1.2 million in total taxes by moving to Florida at the start of last year.

As The Real Deal reported last year, Florida resi brokers have been using tax incentives to try to woo wealthy homebuyers away from the Northeast.

Daniel de la Vega, president of ONE Sotheby’s International Realty in Miami, told Bloomberg he held an event in Long Island in October that included a presentation on the tax advantages of moving to Florida.

Condo developers haven’t been shy in their courtships, either. Vladislav Doronin, who is converting the top floors of the Crown Building in Manhattan into luxury apartments and a hotel, has been inviting tax advisers to his events around the country, according to Bloomberg. He also hosted a tax reform panel at his Miami sales offices last year.

But there’s no consensus on whether the new tax law will actually prompt the “migration” of millionaires brokers and developers are hoping for.

Economists at the conservative Heritage Foundation predicted New York and California alone could lose 800,000 residents to tax-related migration over three years, according to Bloomberg. But Cristobal Young, a sociologist and author of “The Myth of Millionaire Tax Flight: How Place Still Matters to the Rich,” found that modest tax changes have “very small effects” on millionaires’ decisions to relocate. [Bloomberg] — Decca Muldowney

Related Articles

133-25 37th Avenue in Flushing

Developer Gary Tsan buys Flushing property for $60M

From left: 55 East 74th Street, 9 East 82nd Street, 1 Central Park South, 78 Irving Place with Adam Neumann and 111 West 57th Street (Credit: StreetEasy, Wikipedia, Getty Images)

Adam Neumann’s triplex, Russians’ Plaza pad were priciest homes listed last week

3 East 69th Street and 252 East 57th Street 

With asking prices in freefall, luxury market sees strong week

Keller Williams CEO Gary Keller

Keller Williams will cut off agents who leave

A photo illustration of Michael Gianaris and Jeff Bezos (Credit: Getty Images, Wikipedia, iStock)

Gianaris wants to reform NYC tax credit programs that drew Amazon

Wall Street bonus season is the stuff home sellers’ dreams, as they picture eager buyers armed with hefty bonus checks and willing to pay top price. But in a buyer’s market that vision may be more like a mirage (Credit: iStock)

Here’s what Wall Street bonus season means for real estate this year

Adam Neumann and 78 Irving Place (Credit: Getty Images and StreetEasy)

Adam Neumann is asking $37M for Gramercy Park triplex

(Credit: iStock)

Residential rents continue upward march in Manhattan, Brooklyn and Queens