A growing list of public officials in high-tax states are expressing alarm that big earners are bolting to low-tax states as new data suggests some home buyers are moving in response to the year-old change in the federal tax law.
New York Gov. Andrew Cuomo became the latest on Monday when he blamed a $2.3 billion state shortfall on the new federal tax law that he said is driving people to leave the state. During a news conference in Albany, Mr. Cuomo said the 2017 law capping a deduction for state and local taxes at $10,000 is the reason for the deficiency. He specifically mentioned Florida as an attractive option for New Yorkers who are unhappy with the change in the tax law
Preliminary data show a jump in Florida home purchases by buyers from high-tax states. Home values in lower-tax areas have been rising faster than those in places where limiting the ability to deduct high state and local taxes eroded some of the savings from the federal tax reduction, according to an analysis by real estate and data firm Zillow.
One of the biggest winners from this shift has been Miami. The city is experiencing more activity than usual from buyers living in states like New York, New Jersey and Illinois. People are drawn to the city by mild weather—as always—and by deals on condos and lower taxes. They are stepping in after foreign buyers, who helped lift Miami’s condo market out of a tailspin following the financial crisis, have pulled back.
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Laura Kusisto, Arian Campo-Flores, and Jimmy Vielkind, The Wall Street Journal.