Fla.’s Attraction: Is It the Sunshine or Tax Advantages?
NAPLES, Fla. – The Sunshine State can offer more than just sunshine for prospective homebuyers. While the climate has always been a big draw for new residents, another element has led many in recent years to relocate to Southwest Florida: taxes.
Local professionals say that the Southwest Florida real estate market has seen a significant boost thanks to people migrating from northern states with much harsher tax environments. Residents who have lived for decades in states such as New York have taken advantage of an opportunity to find relief in Florida, where the tax burdens are less heavy.
“Nobody, as far as I know, likes to pay more taxes if they can pay less,” said Tony Lachowetz.
Lachowetz, 61, moved down to Florida in November 2018 after retiring as a University of Massachusetts Amherst business professor. He lives in Florida about six and a half months of the year, which allows the educator to establish residency in the state. The remaining months of the year, he spends in Massachusetts where he still has family and a second home. Lachowetz also continues to remotely teach a few online courses for the university.
He said the decision to move was, in part, motivated by the savings he could find to the south.
“It’s just a cost of living move,” he said. “You immediately get real estate tax breaks through the homestead (exemption). You also immediately get a state income tax break.”
Homeowners in Florida can claim an up to $50,000 homestead exemption on their primary residence, which reduces the assessed value of the residence and the property tax that the owner pays.