South Florida luxury property developer BH3 is now benefitting from one of the US housing market’s most significant real estate trends in 2018 — wealthy tax reform refugees from the northeast seeking residences in Florida’s luxury home market.
The Tax Cuts and Jobs Act passed in December 2017 put a $10,000 cap on taxpayers’ ability to deduct state and local taxes (SALT) from their federal taxable income in 2018. The law has a staggering impact on high-income taxpayers in states where taxes can be as high as 8.82 percent in New York, 8.97 percent in New Jersey, and 6.99 percent in Connecticut.
“SALT has crippled the high-end home market in northeast tri-state areas while luxury home sales in Florida have surged,” said Daniel Lebensohn, a New Yorker turned Floridian and co-founder of BH3. “Over the past several months, we’ve seen a tremendous increase in buyer interest from the northeast in the remaining units at Privé, our 8-acre private island community in Miami featuring two 16-story condo towers with 155 high-end units. Many of our new buyers named SALT as the motivating factor for seeking a residence in South Florida.”
Since the SALT law passed, New Yorkers ranked first among those searching for Miami properties on Miami’s MLS, as reported by the Miami Association of Realtors. Additionally, luxury home prices jumped 16 percent in second quarter 2018 from a year earlier, according to data from brokerage Redfin Corp