Sunday, January 7, 2018 / by Carl Gentile
With the new tax laws and states struggling to collect revenues and in turn raising tax rates, the well to do, and even the not so well to do, are looking for ways to minimize their income tax bills. Income tax coupled with state death taxes - think about Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York and Pennsylvania - or even just think of one, California, with the highest personal income tax rate of 13.3% but no state death tax, the incentives for the wealthy to look for a more desirable (as in less taxing) place to call home are enormous.
5 Advantages of Becoming a Florida ResidentFlorida is a state that is frequently mentioned when the wealthy are looking to make a move to a less taxing state. But the absence of taxes is not hte only reason Florida is such an attractive place for the well to do to move. Couple beautiful beaches and weather with the following five things and Florida stands out pretty quickly as a place for the well to do, as well as the not so well to do, to call home.
1. Florida doesn't collect an individual income tax.This list does start off with a tax benefit of becoming a Florida resident because to the welathy this is paramount. Florida is one of only seven states in the country that do not collect an indidivdual income tax at the state level. Moving to Florida from a state like New York can save someone in a high-income tax bracket thousands or even MILLIONS of dollars in taxes. Especially now with the changes in property tax laws and write offs this incentive has quickly become even more popular. The prohibition against collecting an individual income tax is part of the Florida Constitution, so Florida won't be imposing a state individual income tax anytime soon, that we can guarantee.
2. Florida doesn't collect a state death taxThe second item on the list also deals with taxes because, again, taxes can greatly effect net income to the wealthy. In 2005 the Florida state estate tax or "pick up tax" was phased out. These alterations were made at a state constitutional level, as the personal income tax, therefore, do not expect a state death tax returning anytime in the immediate future. Moving to Florida from a state like Massachusetts or New York can save a family thousands if not millions of dollars in state death taxes!
3. Florida offers many asset protection benefits.One of the biggest fears to gaining wealth is losing assets to a creditor or a lawsuit. Florida offers many asset protections benefits, including but not limited to, homestead creditor protection; tenancy be the entirety for real property as well as personal property; protection of the cash value of life insurance; protection for IRAs and annuities; and protection of assets held in a property structured business entity.
4. Florida offers property tax benefits for a primary residenceIf you buy a home in Florida and declare that it is your primary (Homestaed) residence, then, aside from the asset protection benefits mentioned in #3 above, you will also receive two property tax benefits. First, you will receive an exemption for the first $50,000 of value of proeprty tax purposes (except for school district taxes which only receive a $25,000 exemption). Second, which is of great benefit as your homestead residence increases in value the more years that you own it, is the "Save Our Homes" cap on annual assessments.
The cap is set at the lower of 3% or the change in the Consumer Price Index (CPI), which means that the assessed value of your homestead for property tax purposes cannot increase on annual basis by more than the change in the CPI or 3% if the change in the CPI is more than 3%. For example, in 2013 the change in the CPI was only 1.7%, so the 2013 assessed value of a homestead residence cannot increase by more than 1.7%, while in 2008 the change in CPI was 4.1% but the increase in the assessed value was capped at 3%. This is a big deal if you plan to stay in your homestead for many years - as the property's value increases over the years, you will be building equity that in essence will be sheltered from increases in property taxes.?
5. Florida is home to many top wealth strategists, tax advisor's and estate planning attorneys.Because Florida is such an attractive state for the wealthy to call home, it is also home to many top wealth strategists, tax advisors, and estate planning attorneys. These advisors are creative and proactive in assisting their clients with growing wealth, minimizing taxes, avoiding probate, keeping clients' final wishes private, and creating ongoing legacy.
Should you become a Florida resident?Becoming a Florida resident is actually quite easy since Florida will be happy to have you. The more difficult part will be cutting all, or at least the right number, of ties to your former state of residence to convince the state revenue department that you are no longer living there and, therefore, can't be taxed there.
This is particularly important for someone who maintains a home or a business in a state other than Florida. If you are ready to start your South Florida home search and begin to maintain long term wealth through our many benefits, visit www.MyPalmBeachHomeFinder.com to begin browsing freely the beautiful properties we have to offer.