Moving to Florida from a High-Tax State? Here's What You Save

The single biggest financial reason people relocate to Florida is simple: Florida has no state income tax. For someone earning $150,000 to $500,000 or more, that alone can mean $10,000 to $50,000+ in annual savings depending on where you are coming from. Over 10 or 20 years, that is hundreds of thousands of dollars — money that stays in your pocket, your investment accounts, or your new home.

I work with families every day who are making this move from states like Illinois, New York, New Jersey, Minnesota, California, and even Canada. They are not running from problems — they are choosing a financial and lifestyle structure that works better for the life they want to build. Here is what the numbers actually look like.

From Illinois (Chicago)

Illinois has a flat state income tax of 4.95% on all income. Here is what that costs you:

• On $200,000 income: you save approximately $9,900 per year by moving to Florida.
• On $300,000 income: you save approximately $14,850 per year.

And that is just income tax. Illinois also has some of the highest property taxes in the country — an average of 2.16% of assessed value. Chicago's Cook County transfer tax and city levies add to the burden. None of that follows you to Florida.

From New York

New York's state income tax ranges from 4% to 10.9%, depending on your income bracket. And if you live in New York City, you pay an additional city income tax of 3.078% to 3.876% on top of that.

• Combined New York State + NYC tax on $300,000 income: potentially $30,000+ per year.
• On $500,000 income: combined state and city taxes can exceed $60,000 per year.

New York property taxes are also among the highest in the nation, averaging 1.72% of assessed value. The savings from moving to Florida can be dramatic for New York City residents — in many cases, the tax savings alone cover the cost of a Florida mortgage payment.

From Minnesota

Minnesota's state income tax brackets run from 5.35% to 9.85%, depending on income.

• On $200,000 income: you save approximately $10,700 to $19,700 per year.
• On $300,000 income: savings can exceed $29,000 per year.

Minnesota also has high property taxes and a state estate tax that does not apply in Florida. For families in the Twin Cities or across the state, the cumulative tax advantage of a Florida move is significant.

From New Jersey

New Jersey's state income tax rates range from 1.4% to 10.75%, depending on income bracket.

• On $200,000 income: you save approximately $10,000+ per year.

But the real story in New Jersey is property taxes. New Jersey has the highest property taxes in the nation — an average of 2.28% of assessed value. The combined state income tax plus property tax savings of a move to Florida can be substantial, often totaling $15,000 to $30,000 or more per year for a typical household.

From California

California's state income tax rates range from 1% to 13.3% — the highest in the nation.

• On $200,000 income: you save approximately $14,000 to $17,000 per year.
• On $500,000 income: savings can exceed $50,000 per year.

California's high cost of living, property taxes, and state levies make Florida an attractive alternative for many families. For a high-earning household, the annual tax savings alone can be the equivalent of a significant raise — without changing your income.

From Canada (Toronto)

Canadian federal tax rates range from 15% to 33%, and Ontario provincial tax adds another 5.05% to 13.16%, depending on income.

• Combined federal + provincial on $200,000 CAD: approximately 33% to 43% marginal rate.
• Florida has no state income tax, and there is no state equivalent to Canada's provincial taxes.
• No HST/GST on most purchases in Florida (Florida sales tax is 6% plus county surtax, but there is no state income tax).

Important: Canadian citizens relocating to the US should consult with a cross-border tax advisor. There are specific rules about residency, FBAR reporting, and treaty benefits that affect your tax situation. This is not a decision to make without professional advice.

More Than Income Tax: Other Florida Tax Advantages

No State Estate or Inheritance Tax

Florida has no state estate tax. For high-net-worth individuals, this can save hundreds of thousands or millions in estate taxes compared to states like New York, New Jersey, Illinois, or Minnesota, which have their own state-level estate taxes. The federal estate tax exemption is currently $13.61 million per person (2024), but state estate tax thresholds are much lower — some as low as $1 million.

Homestead Exemption

Florida's Homestead Exemption reduces your property's assessed value by up to $50,000 for primary residences. The Save Our Homes cap limits annual assessment increases to 3%, protecting you from runaway property tax growth. This is a significant advantage over states where property tax assessments can jump dramatically from year to year.

No Intangible Income Tax

Florida has no tax on investment income, dividends, or capital gains at the state level. For retirees and investors, this means your portfolio growth is not taxed at the state level — a major advantage over states that tax investment income.

Lower Property Taxes Compared to High-Tax States

Florida's average property tax rate is approximately 0.83% of assessed value. Compare that to:

• New Jersey: 2.28%
• Illinois: 2.16%
• New Hampshire: 2.18%
• Connecticut: 2.15%

With the Homestead Exemption, many Florida homeowners pay even less than the state average. On a $500,000 home, the difference between Florida's 0.83% and New Jersey's 2.28% is over $7,000 per year in property taxes alone.

What You Should Know Before You Move

Consult a Tax Advisor

Every person's tax situation is different. The savings above are estimates based on general income levels. Your actual savings depend on your specific income, deductions, filing status, and investment portfolio. Cross-border situations (Canadian citizens, multi-state income) require specialized advice. Florida does not have a state income tax, but you still pay federal income tax.

Driver's License and Vehicle Registration

Florida requires you to obtain a new driver's license within 30 days of establishing residency. Vehicle registration must be completed within 10 days of establishing residency or starting employment. These are the practical triggers that establish Florida as your legal domicile.

Homestead Exemption Timing

To qualify for the Homestead Exemption, you must establish Florida as your primary residence by January 1 of the tax year. Apply through your county property appraiser's office — the deadline is March 1 each year. If you are moving mid-year, you may not qualify for the exemption until the following tax year, so plan accordingly.

Larissa Locke · Expert Real Estate Advisor · Paradise Coast Homes at eXp Realty LLC · FL License #3407292 · Serving Naples, Bonita Springs, Estero, Fort Myers, and all of Southwest Florida.