The passage of the Tax Cuts and Jobs Act in December 2017 has sent wealthy northeasterners fleeing to Florida's luxury home market, which has been a boon for South Florida luxury property developer BH3.
The law put a $10,000 limit on taxpayers' ability to deduct state and local taxes (SALT) from their federal taxable income in 2018, and that's had a huge impact on high-income taxpayers in some states: Taxes reach 8.82 percent in New York, 8.97 percent in New Jersey and 6.99 percent in Connecticut.
"SALT has crippled the high-end home market in northeast tri-state areas while luxury home sales in Florida have surged," says Daniel Lebensohn, co-founder of BH3. "Over the past several months, we've seen a tremendous increase in buyer interest from the northeast in the remaining units at Privé, our 8-acre private island community in Miami featuring two 16-story condo towers with 155 high-end units. Many of our new buyers named SALT as the motivating factor for seeking a residence in South Florida."
Since the law passed, New Yorkers ranked first among those looking for Miami properties on Miami's MLS, according to the Miami Association of Realtors.
In addition, luxury home prices jumped 16 percent in the second quarter of 2018 from a year earlier, according to Redfin Corp.