Have You Considered the Benefits of Florida Residency?
By Dan Humbert
During the winter months, the thoughts of many folks in the cold North turn to sunshine and sandy beaches in beautiful Southwest Florida. And for good reason—the weather and quality of life here are unsurpassed. I know—I myself was a Northern transplant here many years ago.
Aside from its sunshine and beaches, Florida also offers unique financial benefits that also draw many people here to establish Florida residency. Especially retirees.
Here are three advantages of Florida residency that you might consider:
- Florida has no state income tax
Florida’s Constitution provides that there is no state income tax, and in addition prohibits counties and cities also from imposing an income tax. Florida is only one of seven states in the U.S. that have no income tax. Compare this to someone living in New York City, where the City imposes an income tax up to 3.648% and New York State imposes an additional income tax of 4% to 8.82%. This is a combined rate of 7.648% to 12.468%!
- Florida has no estate tax
Florida’s Constitution bans a separate estate tax like those present in many other States. In those States, your assets are taxed upon your death, before any distribution to your children. Presently, under U.S. law, you will not face Federal estate taxes if you die with an estate valued at $5.25 million dollars or less (in 2013). Not so in many States, which impose an estate tax of on any estate valued in excess of $1 million dollars at marginal rates as high as 16%. Using again the example of a resident of New York State: If a New Yorker passes away in 2013 with an estate worth $5.25 million, the New York’s estate tax would equal $420,800!
- Florida homestead law
In some states, if you are unfortunate enough to have judgment entered against you in a Court of law—whether based on a car accident, an unpaid debt or other legal claim, the judgment creditor can execute its judgment against your personal home. This means you can lose your home to a judgment. Not so in Florida, where the state Constitution protects a homeowner from losing his or her home to a judgment creditor. (Note: this does not apply to a mortgage on the home). This protection gives retirees and other residents of Florida the peace of mind that they will never lose their home to a creditor’s claim.