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HomeWealth ManagementLeaving New York for Miami Can Save Practically $200,000

Leaving New York for Miami Can Save Practically $200,000


(Bloomberg) — For individuals who make $650,000, transferring to Miami from New York can save practically $200,000 a yr because of decrease taxes and a less expensive price of dwelling.

That’s based on a new research from monetary data supplier SmartAsset, which checked out how a lot folks with six-figure salaries in New York, San Francisco and Chicago can save on taxes and different prices in the event that they decamp to the South Florida metropolis.

For folks with a $650,000 wage who depart San Francisco for Miami, the financial savings is estimated at greater than $150,000, the research discovered. It’s a special story in Chicago, the place the financial savings was about $10,500, largely as a result of the price of dwelling within the Windy Metropolis is cheaper and that offsets the tax advantages in Florida.

Florida has lengthy been a vacation spot for retirees from the Northeast, who flocked south for the higher climate and decrease taxes. However the exodus from high-cost states together with New York and California to the Sunshine State accelerated through the pandemic. That’s helped pushed housing costs greater, particularly in Miami.

The actual property surge has lower into the financial advantages of transferring to Florida, at the least a bit, and billionaire tech investor Peter Thiel lately mentioned relocating from Silicon Valley to Miami didn’t make sense.

SmartAsset checked out single tax filers incomes between $150,000 and $650,000 yearly in New York, San Francisco and Chicago and they took into consideration federal, state and native tax knowledge. They used downtown areas of every metropolis to account for housing bills and value of dwelling.

Not surprisingly, the research discovered that the financial savings slide together with revenue, however folks making $200,000 a yr in San Francisco and New York would nonetheless see important advantages from the Miami transfer. 

Manhattan and Miami have probably the most drastic variations in price of dwelling, based on the report. Prices are 138% greater than the US common in Manhattan, however solely 23% greater than the typical in Miami.

That distinction is closely influenced by Florida’s lack of state revenue taxes: Whereas folks making $650,000 a yr face an efficient tax charge of 45% in New York,  that drops to 35% in Miami.

The efficient tax charge for folks in San Francisco making $650,000 a yr is 46%, with the town costing 83% greater than the US common.

In Chicago, in the meantime, the price of dwelling is simply 17% greater than the nationwide common and the efficient tax charge on folks making $650,000 a yr is about 40%, based on the research.

–With help from Amanda Albright.

To contact the writer of this story:

Natasha Solo-Lyons in New York at [email protected]

© 2023 Bloomberg L.P.

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