Relocating to Miami from New York City | How You Can Pay Your Miami Mortgage with Your NYC Tax Savings
Why New Yorkers are relocating to Miami
The NYC Tax Benefit that Provides you with a Luxury Life in Miami
New Yorkers see solid reasons to relocate to Miami and buy a property!
This week I had the opportunity to sit down with David Gruen, a Miami-based financial advisor who has helped many New Yorkers with their tax management when relocating to Miami. As a real estate agent I was aware of the tax advantages in Miami and the fact that many New Yorkers are looking south for a second home, but little did I know about the far-reaching tax benefits this move would bring along. I also learned that you don’t need to be down here in Miami all year round, you just need to be out of New York for more than 181 days.
Listen to my entire conversation with David Gruen
Latest Trend among wealthy New Yorkers: Stay out of New York for at least 181 days, with the 14,4% tax savings you can buy a property in Miami and reside here during the winter while building equity
The financial benefits of moving from NYC to Miami – From a high tax state to a low tax state
Have you ever wondered why the Giants and the Jets are playing in New Jersey and not actually in NYC? Because NY taxes are 14,4 % while Jersey taxes are about 8%. New York’s hefty tax bills are the reason many residents are leaving the city while others are trying to find a loophole that allows them to both be in New York City while also avoiding the city’s taxes. Avoiding the NYC taxes is a big deal and many New Yorkers are now seeking split residency between NY and Florida, which allows them a luxurious Miami lifestyle (including a Miami property) with the money they saved in taxes.
Finding the Benefit
If you are in New York for more than 181 days per year you will need to pay taxes. NYC is a high-income tax state and for that very reason the government will try to keep you there as much as possible. If you would find a way to spend less than 181 days in NYC you can avoid the 14,4% tax bill. Many New Yorkers move to Miami or reside in Miami for the majority of the year as this state does not have income tax while it provides for a luxurious lifestyle. The Florida government doesn’t care how long you are in Miami, so for split residents it only matters that you are NOT in NYC for 181+ days. You could spend the summer in Europe, Miami or wherever as long as you stay away from NYC.
It is important to know how NY counts the days. If you stay overnight in NYC, the state sees that as a 2 day stay. If you fly internationally from NYC to Barbados for two weeks,every day you spent in Barbados counts as a day spent in New York City. Newark airport in Jersey exists to be a Benefit for NYC residents to not be in NYC. You drive to Jersey, catch a flight out and these days don’t count as NYC days.
In the end it is just a lifestyle constraint. You can save a lot of money, but you can only be in NYC for about 5 months max. Many of David Gruen’s clients set up their life in this way and are happy with it. For example when they go to NYC for business they make sure they don’t spend too many days there and when Christmas approaches and they have spent close to 181 days in NYC already, they rent a Jersey hotel room to spend time with their family and still be able to profit from the enormous tax breaks. They have a home in NYC, but they just uber to their home from the hotel to not be officially in NYC
This dual residency of wealthy New Yorkers in quite the trend at this moment with websites explaining how to profit from this Benefit. For example there are sites providing you with three-leg trips leaving from for example Miami, with an overlay in NYC to a destination outside NYC. You don’t take the first leg of the trip (Miami to NYC) so it shows you took flight from Miami and NYC does not count your stay as NYC-credited days.