Not as low taxes as expected: Americans who moved to Florida receive huge bills
Many New Yorkers, thinking that the state will be their tax haven, move to Florida. But in reality, everything is not as colorful as they would like. The edition told in more detail Business Insider.
Over the past three years, New Yorkers have accelerated their move from the Big Apple to the Sunny State due to year-round warmth, a comparatively lower cost of living, and smaller tax bills.
But while Miami's sun seems to last forever and the average home price is still lower than New York's, the benefits for new residents aren't what they used to be. An increase in home purchases drives up property values and forces new homeowners to pay higher taxes, according to a new report from real estate data firm Attom.
Single-family property taxes in Miami jumped 12,6% between 2021 and 2022, one of the largest increases in a single city in a year. Americans, who own 87 million homes, owe a whopping $339,8 billion in property taxes in 2022, up 3,6% from 2021, when tax bills rose just 1,6%, according to the data.
Florida's Unique Property Tax Laws
It was previously reported that for many Florida residents, this surge came as a big surprise. Since the mid-1990s, Florida has had a unique property taxation system: under a constitutional amendment called Save Our Homes, most of the tax burden is placed on newcomers or first-time homebuyers.
The property tax increase for existing homeowners is capped at 3% per year. So even if their home values skyrocket as newcomers flock to the region, higher tax bills may still be within their reach. The tax ceiling is also transferable: it remains with the homeowner if he decides to buy another home in the state.
That's great news for Florida permanent residents overwhelmed by the flood of newcomers, but it could come as a shock to carriers that have used current tax bills to estimate the cost of living. In other cases, retirees who live on a fixed income were forced to move out of state because they simply couldn't afford higher taxes, said Matt Simmons, a Fort Myers appraiser who has worked with several people who have faced the issue.
However, there is another huge benefit for New Yorkers heading to Florida that remains. It is the absence of income tax that creates savings that can easily offset any unplanned real estate expenses.
Newcomers too may face higher property prices
While Florida is a notable example, it's not just people who traded their Manhattan apartment for a Miami Beach home that may face shock when they see their latest property tax bills, Attom data shows.
You may be interested in: top New York news, stories of our immigrants and helpful tips about life in the Big Apple - read it all on ForumDaily New York
This trend is seen across all warmer states, which include some of the most attractive regions for travelers even before the pandemic. The data shows property taxes in the southern region rose by an average of 5,8% in 2022, well above the national average of 3% and the 0,7% growth seen in the northeast.
Of course, there are some exceptions to this trend.
For example, in the northeastern city of Pittsburgh, property taxes increased 59,6% year-over-year, giving it the dubious honor of topping Attom's list of U.S. municipal tax hikes. On the other hand, the Arizona cities of Phoenix and Tucson saw property tax bills drop 2,6% and 1,4%, respectively, putting them among the places that saw the sharpest declines last year, according to Attom.
But still, it's not very nice if you're moving because of low taxes and instead get a big bill.
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