Visit Florida For The Sunshine Stay For Low Taxes
You already know that people come to Florida for the sunshine, beaches, shopping, resorts and restaurants. Often overlooked is why so many people also make Florida their permanent home. In addition to some of the best home and condo prices in America's most popular vacation and life destinations, Florida also has some of the lowest taxes in the United States!
According to the independent research organization Tax Foundation For America, Florida has one of the lowest tax burdens in the United States with the fifth-lowest total tax burden on its residents and businesses.
State Income Tax
Why do you think so many big time athletes and celebrities move to Florida? People like Tiger Woods, Rush Limbaugh, Serena Williams, Celine Dion, LeBron James and Michael Jordan. Florida is one of only seven states with no state income tax.
While Florida property taxes average about two percent of the appraised value, people who make Florida their primary home can substantially reduce their property taxes via the Florida homestead exemption. Florida provides homestead exemption on the first and third $25,000 of the assessed value of an owner occupied residence.
Even better, the “Save Our Homes” (SOH) amendment to the Florida constitution. Similar to California's Proposition 13 that restricted the annual increase of the assessed value of an individual's primary home, Florida's SOH regulations limit annual increases in assessed value of properties with a homestead exemption to three percent or the change in the consumer price index, whichever is lower. Since many experts predict that Florida home values will increase dramatically as more baby boomers move into retirement and Europeans, Canadians and South Americans snap up Florida's cheaper real estate, this is a huge deal for anyone who makes Florida their primary home.
To give an example, if you buy a Florida condo in 2014, for $200,000, your yearly property tax will be about $4,000. If your condo's value doubles to $400,000 in 2024 (7% per year average increase) and you meet the Florida “primary and homestead” requirements your condo tax bill would be based on a value of $269,000 (based at max 3% per year increase). Instead of $400,000. Projecting the same inflation numbers over 20 years, your property would only be valued at $361,000 instead of $800,000. With the SOH, tax savings per year in this example would be over $2,500 per year in 2024 and over $10,000 per year in 2034.
Local Market Monitor recently released its predictions for home prices in 19 Florida cities. The North Carolina firm tracks 315 markets nationwide. Looking ahead to 2014, 2015 and 2016, they predict Florida home prices will increase 26 percent for the three-year period. Florida home prices have already increased 20 to 30 percent since the 2011 market bottom.
Florida is about in the middle of the 50 states with a 6% sales tax rate on the sale or rental of goods, with exceptions such as groceries and medicine. Florida counties are able to levy local taxes on top of the 6%. We are in the Fort Lauderdale area where the tax is 6%.