More northerners in high-tax states are cashing in their real-estate chips to move to places like Florida, reports the South Florida SunSentinel.
Real estate pros say “a steady flow of tax refugees” is heading to the Sunshine State from places like New York, New Jersey and Connecticut. Some real estate experts in the know claim that an influx of people from California and other western states may not be far behind.
But when out-of-state residents relocate to Florida, their former home states lose out on tax revenues, meaning a rigorous tax audit may not be far behind.
Those tax audits can dig deep into airline, cellphone, country club, vet, and other personal records, trying to establish whether the former New Yorker, to take one example, has really severed ties up north to become a full-time Florida resident, or whether he’s simply a New Yorker trying to evade state tax by pretending to move south.
Those “non-residency” audits can be worth their weight in gold. According to the Sun Sentinel and CNBC research, the state of New York conducts roughly 3,000 audits each year, and in just seven years managed to collect a cool $1 billion in taxes from people who didn’t make a clean enough getaway.
So if a move to the Sunshine State is in your future, make sure to do it the right way. Consult with your financial and tax advisors for tips on what to do to make a clean break.