Since the pandemic began, relocating to Florida has accelerated. In fact, since 2014, Florida eclipsed NY, becoming the third largest state in population behind Texas and California. People are leaving the Northeast and relocating to Florida particularly for the climate and because Florida just so happens to be one of only seven states with no state income-tax.
Prior to 2018, northerners in high-tax states like New York and New Jersey could deduct some of their income-tax by taking a state and local Tax (SALT) deduction. Due to the passage of the Tax Cuts and Jobs Act of 2018, the SALT deduction is now capped at $10,000.00. As a result, many people are moving to our Sunshine State.
It is not just individual homeowners that are leaving but also large corporations are considering Florida as their new hub. On December 13th, news broke that Goldman Sachs, one of the largest investment banks based in New York City, is considering moving its asset management operations and many of its other large divisions to South Florida, with Fort Lauderdale and Palm Beach County the most likely destinations. Several other investment firms such as Citadel and Blackstone have also recently boosted their presence in Florida, most seeking lower costs, warmer weather and, of course, a friendlier state tax code.
Besides the climate and taxes, there are other reasons why people continue to choose Florida home. While COVID-19 may have proved to be the final straw for families who were on the fence, many find that Florida is much less cramped than the large northern cities, provides access to style and culture to which they have grown accustomed, and has much more affordable housing. For the price of a one bedroom in Manhattan, you can own a single-family home within a short drive to cultural and financial meccas such as Miami, Fort Lauderdale, Tampa, Orlando, and Jacksonville.
To Do’s for Relocation
Should you decide to move to Florida, whether it be to take advantage of the tax laws or for any other reason, there are a few important steps you need to take in order to establish yourself as a Florida resident. First, make sure you update the DMV in your current state with your new Florida address and surrender any license plate tags once you have settled into your new home in Florida. Florida’s Department of Motor Vehicles requires to you register your vehicle within 30 days after establishing your Florida residency. Next, register to vote in Florida. Conveniently, you may apply for your Florida Voters Registration at the DMV when you are getting your Florida driver’s license and registration, or you can apply online.
After you close on your home, apply for Florida Homestead protections with your county’s property tax collector’s office. Many northern states have enacted laws that allow them to classify people who domicile elsewhere as “statutory residents” in order to collect taxes from people or businesses who have moved elsewhere. Some states even require former residents to file Nonresident State Tax Returns if there was any income generated from that particular state. As a result, you may also want to record a Declaration of Domicile in which you confirm that Florida will be your principal residence. This document further strengthens your position that Florida is your intended residence for income and estate tax purposes.
Finally, if you still have a financial connection to your prior state such as a corporate entity, you should speak with your accountants and attorney regarding transferring the corporation to Florida.
In addition to the steps above, there are a few tips to consider in order to establish domicile in Florida and effectuate a smooth transition:
- Spend over 6 months in Florida; and less than 6 months in any other State;
- Open a bank account at a Florida branch and use your account regularly;
- List a Florida address on your Federal tax return; and,
- Confirm that your Will, Trust, or other Estate documents comply with Florida requirements.
Our office can assist in making your transition to Florida as smooth as possible. The title professionals, at our sister company, Weston Title & Escrow, are here to help when you are purchasing a home and our attorneys are here to answer any questions you may have. On a personal note, I moved from New York City more than 33 years ago with my partner and wife, Ellen, so I look forward to guiding you should you decide to relocate to Florida. Should you have any questions, kindly call us at 954-384-6114 or e-mail us at email@example.com.
From the Trenches
Originally posted at: https://southfloridalawblog.com/a-change-of-scenery-the-migration-to-florida/