Comment by credit_guy | Hacker News Reader

Comment by credit_guy | Hacker News Reader

Non-sense. Their example assumes that some new-yorker who earns $10MM as regular income (not capital gains) not only buys property in Miami but also moves with the job there. Well, good luck finding a job that pays $10MM in Miami. But even if you do, it's still non-sense. Here's the tax picture before and after the new law (from the article):

-before: NYC $5.1MM, Miami $4.2, difference $900k

-after: NYC $4.9MM, Miami $3.9, difference $1MM

So for some reason, you decided the NYC lifestyle is worth a $900k hit in your total income (which after tax is about $5MM), but $1MM will make you pack up and move to Miami. Really?

If you earn only capital gains, please note that your property tax rate in Miami is much higher. Sure, you'll be able to deduct more for federal tax purposes, but that's faint consolation as overall, you'll still end up paying more.

All in all, this is probably a submarine piece by the realtors in Miami hoping to get the rich guys in NYC to spend of few minutes even considering buying property there. It doesn't matter that the tax calculus does not make sense, maybe they'll like the sun ...

Wait, why would capital gains make less of a difference? New York does not have a separate capital gains tax -- it's taxed at the same rate as regular income. It makes zero difference to the article's analysis if your income comes from investments or ordinary income (in fact, I would think that the NY vs FL difference is probably even more tempting to someone with capital gains income even if the raw dollar amount is the same).

You've also mixed up your before and afters for NYC when you tried to copy from the chart (NYC became more expensive after the new law, Miami became less expensive). The difference before the new law was about 700k, and the difference after the new law is about 1.2m. As the article says, the difference between taxes in Miami and NYC has gotten $450,000/year worse with the new law, not $100,000 worse.

I think you're probably right about the overall impact being small, however.

There are many articles over the years reporting the hedge fund moves from NY/CY to Miami. So they are bringing their $10M jobs with them in that case.

If you’re wealthy enough to travel most of the year for businesss or pleasure, why wouldn’t you make your resident state Florida?

1. https://www.bloomberg.com/news/articles/2018-06-04/florida-n...

2. https://www.reuters.com/article/us-appaloosa-hedgefunds-miam...

An anecdote that I previously posted on another thread and will repeat here:

A couple months back, I flirted with moving from NYC to Las Vegas for tax reasons. I was shocked at the expense of luxury housing there, and construction costs were similarly high (I was quoted $450-$500/sqft, on par with NYC). My realtor explained to me that rich Californians were "stampeding" into Nevada and had increased the cost of all things high-end by 50-100%--basically in the span of a year! She was very bearish on the market.

It seems some measure of rich flight is playing out in California/Nevada; enough to transform segments of the housing market. It's not far-fetched to imagine the same with New York/Florida.

I don't know WTF you were looking at, but I was just in LV with my Dad looking at property. Many of the brand new Turnberry high rises (they're like 20 - 35 stories) rent for $1/square foot/month and sell for like $100 - $200/square foot. They are absurdly cheap, as most of the other places he looked, and they're modern.

Keep in mind that some have unreasonable asking prices. So I don't know what you were looking at, but the market is falling in LV (my Dad has been seeing price drops over the time period he's been looking). Here is some quick data via Duck Duck Go: https://ballenvegas.com/las-vegas-real-estate-market-report/...

All fair points. I'm an outsider, so I don't know what a "fair" price looks like, or how that's evolved over time. FWIW, I was looking for single family homes in Summerlin and Henderson. A quick Zillow search indicates plenty of inventory at $500+/sqft; it was at this price point that I found the homes began to compare favorably to other luxury markets around the country.

What the article misses is that it's most likely being sold as a tax dodging scheme. In other words, buy a house in Miami, claim FL residency, avoid all of these taxes but spend most of your time in NY.

Technically you couldn't spend most your time in NY and still claim residency in FL. Laws require you to spend at least half the year in FL and have done other things besides buy a property to show that you really do live in that state.

Yes but what the law says and what law enforcement can prove are two different things.

The NY Department of Taxation and Finance is incredibly aggressive in pursuing such cases, and the burden of proof is on the taxpayer to show that FL is in fact their primary residence. Those wealthy people that spend substantial time in New York keep careful location records (especially if they have a residence there).

The State of Florida has signed on in support of California's sovereign immunity from lawsuits about its tax collection policies against people who move to Nevada to avoid taxes. That case is before the Supreme Court right now.

Florida won't be your friend if New York comes knocking.

https://www.supremecourt.gov/DocketPDF/17/17-1299/64090/2018...

> NY Department of Taxation and Finance is incredibly aggressive

To give this some specificity, I have multiple former colleagues who live in Connecticut and commute to New York who have had their cell phone location data subpoenaed. If you’re going to decamp from New York for tax purposes, actually decamp.

And of course I assume this data is archived indefinitely?

Yes. And this may go on for years after you have actually moved. I have a friend who moved out of NYC around 8 years ago and due to is income level is audited by NY every year. He now has a detailed system so he can account and prove his whereabouts in multiple ways every day of the year.

That makes no sense. If you own property anywhere, you have to pay property taxes. Plus you don’t have to own property to claim residence. Fraudulently or not.

The entire article discusses saving money on income taxes not property taxes. According to the chart, property taxes are more expensive in Miami.

I’m not sure if there’s much of a reason to become downright upset about the article.

As a Miami resident, it’s clear that Miami is extremely influenced by NY and NY’ers living there to begin with. So I’m not sure if this is really news. NY’ers essentially built up what is Miami now and there is a strong sphere of influence from NY in Miami.

Miami is basically a satellite economy of NY. The big thing that Miami doesn’t have is high paying jobs. And tech in Miami is virtually nonexistent.

But wealthy folks residing in Miami don’t really need to worry about landing a decent job in the first place.

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