As if you need further impetus to move to the Sunshine State, there are purely practical financial reasons to shift your residence south. Along with the mild winters and beaches, you’ll also find a favorable tax climate.
This is a big deal if you’re moving from a state that mandates state income taxes and death taxes. Florida also offers tax savings with what’s known as a homestead exemption.
The higher your income bracket, the more a move to Florida can impact your potential tax savings. But every taxpayer can enjoy some benefit from at least two of the following three Florida tax breaks.
No State Income Tax
Seven states eschew state income taxes and Florida is one of them. That’s a relief no matter your financial situation. It’s one less form to fill out and one less check to write come tax preparation time.
A death tax is levied on a deceased person’s estate. Again, per your tax bracket and state of residence, this can be onerous. Florida doesn’t impose a state death tax. The state constitution prohibits it.
If you buy a Florida home and designate it as your primary residence, you can claim the first $50,000 of value as a property-tax break, otherwise known as a “homestead exemption.” The exception is if you buy in an area with school-district taxes. Then your homestead exemption is limited to $25,000.
There’s another benefit. Property taxes are calculated via a property-value assessment, which, in Florida, can’t increase more than the annual change in the Consumer Price Index, or, 3 percent if the CPI changes more than 3 percent.
This means your Florida home will increase in value the longer you own it — and build equity — while being protected from egregious property-tax increases. Yay!
Ready to resolve these tax issues with a move to Florida? ICI Homes makes it easy. Click here to get started.