Why millionaires are fleeing NYC and New Jersey
Volatile financial markets and tax changes are driving the shift
Volatile financial markets are leading high net worth individuals to leave New York and New Jersey in droves.
Last year, the region encompassing New York City, Jersey City and Newark lost more than 5,700 individual with liquid assets of $1 million to $30 million, the North Jersey Record reported. The exodus is thanks to turbulent financial markets and changes to federal and state tax laws.
“The folks that technically can afford to live here are also the people who have second homes. They could be in Pennsylvania. They could be in the Southwest. Very often it’s Florida,” said Debra Taylor of Taylor Financial Group in Franklin Lakes, New Jersey. “The tax situation in those states is much more attractive.”
Taylor said she has been advising many wealthy clients to establish residency in other states, as the tax law changes capped deductions for state and local taxes, including property taxes, at $10,000. That shift has increased the cost of living for many of the area’s residents. For one of her clients to remain a New Jersey resident would cost $150,000 more annually, she said.
Even middle-class New Jerseyans are weighing their options. Their money goes farther in states like Texas and Florida, which have lower taxes and a lower cost of living.
According to a previous report, brokers in Florida have taken note. Agents and developers brokers in Florida have been trying to lure homebuyers looking to escape high-property-tax states like New York, New Jersey and Connecticut. For example, 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. He also hosted a tax reform panel at his Miami sales offices last year. [North Jersey Record] — Meenal Vamburkar