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8 Financial Benefits of Moving to Florida

March 15, 2024

If you’re thinking about relocating to Florida and play your cards right, there’s a good chance you’ll end up having a great experience. Sure, you’ll enjoy sunshine all year round, have beaches in close proximity, and get easy access to some amazing national parks. In addition, you also stand to gain from the financial benefits of moving to Florida.

1. Lower Taxes

Many people move to the Sunshine State each year, yet not everyone is aware of the tax benefits the state has to offer. So, what are the tax advantagesof moving to Florida? These come in the form of no personal income tax, lower property taxes, no estate tax, and more. However, while you might get to save on taxes, you should get all the information about possible tax benefits by contacting your account/financial planner or tax advisor.

Personal Income Tax

Taxes are burdensome, to say the least, and Florida aims to ease this burden on its residents to some degree. One of the tax benefits of living in Florida is that the state does not charge any personal income tax. What this means is that no part of your paycheck goes toward paying state taxes. Depending on your income, this could lead to significant savings.

Consider this – you live in Pennsylvania and earn $100,000 per year, paying 3.07% as personal income tax in 2024. By moving to Florida and earning the same amount, you save $3,070 each year.

Tax on Retirement Benefits

Since Florida does not impose personal income tax, it does not tax social security benefits, pensions, IRAs, and 401(k)s. This gives retirees the means to stretch their income a little more. What also helps is you don’t have to pay personal income tax if you choose to work part-time as a retiree.

Estate/Inheritance Tax

Thanks to a federal change, Florida eliminated the provision of charging estate tax on December 31, 2004. As a result, when there is a transfer of estate or other assets upon someone’s demise, no estate or inheritance tax applies to the transfer. What this means is if you inherit property or money, you don’t have to pay taxes to the state.

Property Tax

Probable benefits in property taxes apply to homeowners and not renters. Besides, this depends on the state from which you move. Consider these state-wise annual property tax rates on average-value homes collated by BankRate for the 2022 tax year.

1. New Jersey: 1.79%
2. Illinois: 1.78%
3. Connecticut: 1.57%
4. Vermont: 1.43%
5. Nebraska: 1.36%
6. Pennsylvania: 1.29%
7. New Hampshire: 1.28%
8. Ohio: 1.27%
9. New York: 1.26%
10. Iowa: 1.25%

The same list puts Florida at the 30^th spot, with its annual property tax rate on an average-value home at 0.67%. So, is it worth moving to Florida for tax purposes from the point of view of paying property taxes? It can be, if you move from the 29 states that are above Florida on this list.

In addition, you also stand to bring down your property’s taxable value by up to $50,000 with the Homestead Exemption. While one half of it applies to all the taxing authorities, the other half does away with School Board taxes and is applicable on properties that have assessed values of over $50,000.

2. Affordable Housing

Data released by World Population Review surrounding median home prices by state indicates that the median home value in Florida stands at $407,200. The top 10 on the list are:

1. New York: $819,900
2. California: $785,900
3. Hawaii: $720,200
4. District of Columbia: $668,250
5. Washington: $618,000
6. Massachusetts: $614,700
7. Colorado: $580,900
8. Utah: $529,600
9. Oregon: $510,900
10. New Jersey: $477,600

With Florida taking the 18^th spot, it’s only fair to include housing costs as one of the financial benefits of moving to Florida. However, much like any other state, there can be a significant difference in the prices of homes based on where you wish to purchase one, with smaller towns offering more affordable options than large metropolitan areas. Besides, how expensive a house you can afford also plays a role.

3. Business-Friendly

Florida continues to rank among the top states in the country for business because of a streamlined regulatory environment, cost of doing business, and pro-business tax policies. Consider these statistics collated by Florida Power & Light Company and SelectFlorida that highlight the state’s business-friendliness.

• Florida takes the top spot for offering the best tax climate in the Southeast.
• It is the number one state in the country for attracting and developing talent.
• It ranks as the second best state for doing business in the U.S.
• It ranks number one for innovation.

The state’s 5.5% corporate tax rate helps it attract mid-sized and large businesses alike, and you may also benefit from clean energy-based tax exemptions. It comes as no surprise, then, that the Tax Foundation places Florida at the fourth spot in its State Business Tax Climate Index.

4. A Thriving Economy and Job Market

Data shared by USAFacts indicates that Florida’s economy ranks fourth in size among all the states. In addition, its unemployment rate of 2.9% in November 2023 was lower than the country’s overall unemployment rate. It also highlights that the economic growth of the state is higher than the country’s overall average. Given that the state boasts of a thriving economy and job market along with a business-friendly climate, scores of businesses have already chosen to shift base to Florida.

According to HireAHelper’s 2023 Corporate Relocation Study, 86% more corporations have moved their headquarters to Florida since 2017 in comparison to the number of businesses that have moved their head offices out of the state, which is the highest gain for any state. The three cities that have gained the most include Jacksonville, Tampa, and Miami – putting them on the list of the top cities in the country for relocation of corporate headquarters.

Some of the prominent names that have taken to Florida, either by shifting their headquarters or by building/increasing their presence here, include:

• Blackstone
• Lockheed Martin
• Goldman Sachs
• Paysafe
• Luminar Technologies
• Argo AI
• Amazon
• Walmart
• FedEx

5. Reasonable Cost of Living

Florida’s cost of living index stood at 100.3 in 2023, which was pretty much at par with the national average. This index accounts for different costs like housing, groceries, healthcare, transportation, and utilities. Given the reasonable cost of living in Florida, you may expect to get more value for your dollar if you move here from a state such as Hawaii, Massachusetts, California, New York, Maryland, or Washington.

6. Affordable Higher Education

SelectFlorida points out that Florida has remained the number one state in the U.S. for higher education for five consecutive years, and that it awards more than 100,000 science and engineering degrees each year. However, the reason higher education makes it to the list of the financial benefits of moving to Florida is the affordability factor.

If you plan to send your children to college, Florida not only provides some great alternatives from which to choose, but also ensures providing good education without burning a hole in your pocket.

EducationData highlights that the average in-state tuition at public institutions in the U.S. during the 2019-2020 academic year was the lowest in Florida, at $4,463. In addition, the average cost of studying at local community colleges during 2020-2021 was 28.43% less than the national average, and the average cost of studying at private universities during the same period 9.65% less than the national average.

7. Low-Cost Vacation

Florida serves as the perfect base for people who enjoy vacationing and traveling. For starters, the Sunshine State is home to some highly sought-after tourist destinations, from beaches to theme parks to national parks. This eliminates the need to take long-haul trips for the holidays because there’s a good chance that the experience you seek is not far from home.

Florida is great for people who like to take a cruise once in a while. This is because you no longer have to spend money to take a flight to your port of choice as the state has a few popular ones of its own. These include:

• Port of Miami – Miami
• Port Tampa Bay – Tampa
• Port Canaveral – Cape Canaveral
• Port Everglades – Fort Lauderdale

If you don’t mind a long drive, you also benefit from some great options that the neighboring states have to offer. From Tennessee’s Smoky Mountains to Georgia’s history-soaked Savannah to the live music scene and vibrant nightlife in Louisiana’s New Orleans, you’re only a road trip away from a quick getaway.

8. Elderly-Friendly

Data released by the Population Reference Bureau indicates that Florida was home to the second highest percentage of population aged 65 years or older in 2020, with 21.3% of its population above this mark. Given the significant number of seniors who live in this state, it’s fairly common to find businesses that offer generous senior discounts. Several senior communities and clubs also play their part by providing affordable amenities and activities.

In addition, the Florida Department of Elder Affairs provides an array of programs and services that can help keep finances in check, some of which include:

• Home Care for the Elderly (HCE)
• Medicaid Long-Term Care Services
• Memory Disorder Clinics
• Program of All-Inclusive Care for the Elderly (PACE)
• Adult Care Food Program
• Elder Farmers Market Nutrition Program
• Health & Wellness

Should You Buy or Rent?

If you decide to move to Florida and are unsure if you should live on rent or buy a home, pay attention to these aspects.

• Down payment. Buying a house typically involves getting a mortgage, for which you’ll need to make a down payment. While there are some types of mortgages that don’t require down payment, you need to qualify for them to enjoy this benefit.
• Mortgage payments. Once you get a mortgage, you need to keep making mortgage payments every month until you pay off the loan completely.
• Job security. Having a steady source of income ensures that you can keep making your mortgage payments in a timely manner.
• Creditworthiness. Getting a mortgage can be difficult if you have average or poor credit. On the other hand, the better your credit score, the lower the interest rate you stand to get.
• Level of commitment. Buying a house requires some level of commitment and you should consider taking this path if you plan to live in the house you purchase for five or more years.

Benefits of Buying

Based on where you live, buying a home might cost you less per month than living on rent, especially if you qualify for a VA loan or USDA loan. Once you start making payments toward your mortgage, you begin building equity in your house, and as you keep repaying the loan, your equity keeps increasing. Buying a home can result in tax savings because you may include a percentage of the amount you pay toward interest as deductions, and this is something you should discuss with your tax adviser.

As a homeowner, you don’t have to worry about relocating each time your landlord raises your rent.  Another benefit of buying a home is you get the freedom to make changes based on your likes and dislikes.

Conclusion

So, is it worth relocating to Florida and do you really save money by moving to Florida? The answer to both questions is in the affirmative, provided you’re moving from a place that has a higher overall cost of living. Given that Florida ranks higher than most states in the country when it comes to its economy, taxes, housing costs,  job market, and education, there’s a good possibility that moving here might work well for you.

If you plan to purchase a home once you move to Florida, start by arriving at a suitable budget and identifying the type of loan you wish to get. The next step should be to select a reliable mortgage provider and get pre-approval. This gives you an indication of how much the lender is willing to lend. Then, look for homes accordingly and consider using the services of a real estate agent to streamline the process.