These two low-tax havens are most in demand
There are five states, in particular, where some wealthy Californians and New Yorkers are starting a new life — and two of them are major low-tax havens.
- Florida: 29,771 net inflow of high-earning households
- Texas: 8,260 net inflow of high-earning households
- North Carolina: 5,792 net inflow of high-earning households
- South Carolina: 5,270 net inflow of high-earning households
- Arizona: 4,365 net inflow of high-earning households
While Florida, specifically, is the clear winner here, it’s no mystery why it (and Texas) topped the list — neither has a state income tax.
This would come as a welcome reprieve for New Yorkers, as they face personal state income tax rates up to 10.9% (not counting federal or local taxes) for high-income earners.
Californians, as well, face hefty state income tax rates — the highest in the country — which can soar to a 12.3% bracket. (For those earning more than $1 million annually, the new highest tax rate is a whopping 14.4%).
In addition, these tax-friendly states are particularly attractive to retirees looking to avoid a sizable cut of their retirement benefits to the taxman.
Both of these states also offer plenty of sunshine and boast high rankings in terms of employment opportunities.
According to Zillow’s June 2024 numbers, Florida and Texas also have a more affordable real estate market, where median home sale prices are $385,000 and $342,167, respectively.
By comparison, the median home sale prices were $746,667 in California and $450,000 in New York in recent months.
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Where else are wealthy Americans moving?
Aside from the two aforementioned low-tax havens, the Carolinas are a hot destination for wealthy Americans fleeing California and New York.
As of June 2024, median home sale prices in North Carolina came in at a respectable $341,500, while South Carolina was $317,833. Mild weather, attractive urban centers, lower cost of living, and balmy beaches also ensure a higher quality of life for many.
As for Arizona, a warm climate, bustling economy and the 2023 implementation of a flat income tax rate of 2.50%, make it a desirable location for many Americans.
So, considering the fact that home prices and mortgage rates are still at high levels across the U.S., perhaps packing your bags for the same more affordable locations that are attracting wealthy Americans could pay off for you, too.
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