Rich New Yorkers are fleeing to Miami to escape high taxes

New York millionaires can save more than $1 million in taxes by relocating to Florida, and money goes further in Miami than it does in New York City.

Why Rich New Yorkers are Moving to Miami?

Brickell Financial District on Biscayne Bay in Downtown Miami

More and more rich New Yorkers are ditching the northeast for sunny Miami.

High-net-worth individuals and families from high-tax states like New York, New Jersey, California, and Illinois are moving to the Miami area to take advantage of Florida's status as a no-income-tax state.

I recently spent three days in Miami, touring exclusive private islands, waterfront mansions, and a $48 million penthouse. I spent an afternoon on Fisher Island, a members-only island that's one of the most popular destinations for affluent New Yorkers moving to the area. It's also the richest ZIP code in the US, with an average income of $2.2 million.

It didn't take long for me to see why wealthy New Yorkers were moving to Miami.

Millionaires from New York can save more than $1 million in taxes by relocating to Florida

President Donald Trump's 2017 tax overhaul capped the amount of state and local tax deductions at $10,000, which hit wealthy homeowners in high-tax states like New York and California particularly hard and prompted many to relocate to Florida.

Under the new tax laws, a New Yorker who makes $10 million a year and owns a $10 million home would save almost $1.2 million in taxes by relocating to Florida, according to Crain's New York Business.

Beyond the tax benefits, luxury homebuyers get more bang for their buck in Miami than in New York City

In New York City, I've toured homes including a $40 million triplex penthouse, a $22 million "sky mansion," and a $58.5 million condo on the 87th floor of a Billionaires' Row tower.

In Miami, after I visited a $48 million penthouse, a $29.5 million waterfront mansion, and a $24 million home on a private island, it quickly became clear that money could buy you a whole different type of luxury: The Miami homes are larger and often have generous private outdoor space as well as waterfront locations, surrounding greenery, and swimming pools.

The $48 million penthouse I saw in Miami Beach, for example, spans 11,031 square feet across three floors and included a 2,000-square-foot terrace and a private pool. The $58.5 million condo in New York, on the other hand, has a relatively modest 6,234 square feet of living space on just one floor — and not even the top floor.

There's also no private outdoor space, yet it's more than $10 million more than the Miami Beach penthouse. While it's hard to say that one is categorically better than the other, what I did find was that your money will simply buy you more space in Miami.

As an added bonus, every home I visited in Miami had a pool, a rarity in New York City.

Why Rich New Yorkers are Moving to Miami?

Most homes in Coral Gables have large lots with lush gardens and pools

There is one major downside to moving to Miami

In addition to the tax breaks and the home sizes, there's the simple matter of the weather: Miami has plenty of beautiful beaches to enjoy the temperate weather. New York City has beaches, of course, but they're not nearly as accessible as those in Miami, and they lack the same warm waters.

But, while Miami may have a lot of great things going for it, science indicates that the city is likely to be partially underwater and unlivable within 80 years because of rising sea levels and increasingly intense storms.

When I asked real-estate agents why wealthy homebuyers continued to snap up luxury waterfront homes in Miami, and why developers kept building condominiums right on the water, I was told people weren't too concerned about the future.

Clients are not making their home-purchasing decision on what may or may not be 100-plus years out, they want to enjoy their wealth now with their families in their homes.

Then again, New York City is also surrounded by water, making it susceptible to rising sea levels. But between the two, I can certainly see why millionaires would see Miami as a better bet.

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