MOVING TO FORT LAUDERDALE, FLORIDA: A TAX COMPARISON WITH CALIFORNIA

So, you're thinking about moving to Fort Lauderdale, Florida? Well, in this blog I'm going to be talking about taxes. I know it's not the most exciting topic, but it's definitely beneficial, especially if you're comparing moving from one state to another. In this blog I will be comparing California versus Florida.

Disclaimer: I am not a tax professional, and I highly recommend consulting with one before making any tax related decisions. This information is based on my research and personal experiences with taxes in Florida.

In Florida, taxes are typically broken down into three categories: county, city, and school. As of 2022, I paid 1.85% of my property’s value in taxes. It's important to note that in Florida, property taxes are paid in arrears, meaning you pay them for the previous year. For instance, in the spring of 2022 I paid my property taxes for the year of 2021.

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Additionally, Florida offers a $50,000 tax exemption. The first $25,000 of this exemption applies to county, city, and school taxes, while the second $25,000 applies only to county and city taxes. This exemption can significantly reduce your property tax burden.

Another interesting aspect of Florida’s property tax system is that you can receive discounts for early payments. Paying before the end of November gets you a 4% discount, December gives you 3%, January gives you 2%, February gives you 1%, and if you pay by the end of March there's no discount.

EXAMPLE ONE: $500,000 HOME 

CALIFORNIA: with an average property tax rate of 1.15%, owning a $500K home in California would result in a property tax of $5,750. If you have a combined income of $100,000, you would pay approximately $9,300 in state income tax after considering the $70 exemption your total tax liability would be around $14,800.

FLORIDA: in Florida, with a property tax rate of 1.85% for the same $500K home, your property tax would be $9,250. However, the significant advantage is that Florida has no income tax. After applying the $765 exemption, your total tax would be reduced to $8,485, resulting in an annual savings of $6,315.

EXAMPLE TWO: $1 MILLION HOME

CALIFORNIA: owning a $1 million home in California would mean a property tax of $11,500, along with a state income tax of $18,600 for a combined income of $200,000. Even with a $70 exemption, your tax liability would be just over $30,000.

FLORIDA: in Florida, a $1 million home would have a property tax of $18,500. The advantage of no state income tax remains. After applying the $765 exemption, your total tax would be $17,735, resulting in savings of approximately $12,265.

EXAMPLE THREE: $1.5 MILLION HOME

CALIFORNIA: for a $1.5 million home in California, property tax would be $17,250, and income tax for a $300,000 combined income would be $27,900. After considering the $70 exemption, your total tax liability would be over $45,000.

FLORIDA: in Florida, the property tax for a $1.5 million home would be $27,750. There's still no state income tax, and after applying the $765 exemption, your total tax would be just under $27,000, resulting in a savings of approximately $18,000.

In conclusion, when comparing the tax implications of living in California and Florida, it's evident that Florida offers substantial tax advantages, especially due to its lack of state income tax. While property taxes may be slightly higher in Florida, the overall tax burden is significantly lower. If you're considering a move to Florida, these tax savings can make a substantial difference in your financial situation.

Additionally, I'd like to mention Marty Kiar, the Broward County tax appraiser, and his team. They are an excellent resource for property tax related questions and assistance in the Fort Lauderdale area.

If you're interested in learning more about living in Florida or need assistance with your real estate journey in the Fort Lauderdale area, feel free to reach out to me, Adela Philipson, a local realtor. Whether you're planning to move in 9 days or 90 days, I'm here to help you make the transition smoothly.