Florida Luxury Home Boom

The price of Luxury Real Estate in Florida has risen by a massive 16% from 2017, following the recent U.S Tax reforms.

According to data from Redfin, wealthy home owners in some of the affluent suburbs of New York City have been hit by the $10,000 cap on the tax deduction of state and local taxes. This is encouraging many people to seek out property in the gorgeous Sunshine State.

Although always popular as a winter getaway destination, the changes to the tax laws have been a driving force behind convincing many more people to make the move down south. If you’re a high-income earner, the implications of the tax reform are significant and therefore you might be more tempted than ever to purchase a Florida home.

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The most luxurious and extravagant (and expensive) top 5% of properties in Florida saw the fastest rise in price in 5 years. In particular, sales of southwestern Florida’s million-dollar properties were at the highest in at least 10 years in the first half of this year. They saw a rise of a massive 25% from 2017. In comparison, the rest of the Florida Real Estate market rose only 7%.

However, there may be a couple of other reasons behind the increase in desire for these luxury Florida properties. As mentioned above, the tax changes mostly favor the high-earners who may be deciding to splash out on a second home in Florida – perfect for escaping the cold winters. Also, many of the ‘baby-boomer’ generation are finding themselves ready to downsize, or looking for a notoriously sociable and warm community in which to spend the coming years. The tax reforms might just be the incentive many people needed to make the move. Florida Realtors Chief Economist Brad O’Connor says simply “We were at peak boomer anyway, but tax reform might have pushed them over the top.”

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Original sources: Bloomberg (08/09/18) Gopal, Prashant, https://www.floridarealtors.org

 

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