New Tax Law Shifting Homebuyer Patterns
The effects of the Tax Cuts and Jobs Act are not yet completely quantifiable, yet real estate experts in the field are already seeing changes in interstate migration from high- to low-tax markets.
Chris Leavitt, director of luxury sales at Douglas Elliman Real Estate in Palm Beach, Fla. says, “I’ve seen a huge increase in the number of clients who want to purchase here to establish residency in Florida ... There has been a pickup since Jan. 1.” The Wall Street Journal reports that provisions of the new tax law benefit high-net-worth individuals, including a reduced top individual tax rate, and expanded estate and gift tax exemption.
Real-estate developer David Hutchinson, president of Ketchum, Idaho-based VP Cos., is touting the tax advantages of living in Nevada on the website for Clear Creek Tahoe, a golf community that will ultimately include 368 custom homes—a project in which he is a partner. Californians to the west can pay a state income-tax rate of up to 13.3 percent, while Nevada residents just 30 minutes to the east pay no state income taxes. "If you’re a wealthy tech executive from the Bay Area who can live wherever you want and you have a $3 million income, you would have $399,000 a year in savings here. That’s a lot of money to spend on real estate.”
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