Florida is no newcomer to being a haven for migrants from other states. Bloomberg mentions that, in 2019, a massive exodus of high-earning individuals from other states came to settle in the Sunshine State because of its tax legislation.
The migration that we see today is of a completely different sort. Most people from northern states see Florida as a great place to retire, but not somewhere they’d want to live. With the pandemic raging in cities like New York, however, the wide-open spaces that Florida offers now seem like precisely what city-residents prefer. Residents of places with massive rent bills realize that Florida is both affordable and has a fantastic lifestyle. As with most migration patterns, when the people move, the businesses are swift to follow.
Increased Migration Numbers
Typically, Florida is where people tend to go to retire. However, because of the pandemic, the usual rates of individuals who want to learn more about registering businesses in Florida have spiked.
Even individuals looking to acquire land are eyeing locations in South Florida. What many residents are realizing is that South Florida has better rental prices than they’re used to, without losing out on the amenities. On average, residents can expect to get three times the space for the same price while renting a building in South Florida.
These increased migration numbers are doing wonders for the state’s income as well. It’s estimated that the state has seen an increase of ninety-five billion dollars in gross income because of domestic immigration over the last eight years. This migration has, in turn, fueled the draw for firms to find a home in South Florida.
As more people make their way here, they create the perfect environment for new and developing businesses to interact with consumers. The state’s tax regime also has a role to play in this massive economic growth.
Friendly Taxation Structure
The next reason South Florida has become so much of a haven to northern business owners is how friendly their tax legislation is. Not only do high-earning individuals benefit from relaxed taxation, but so do businesses. Additionally, Florida remains one of the few jurisdictions that support single-member LLCs as a corporate type. Business owners, especially those from New York, are amazed at the taxation regime.
Individuals who are taxed less tend to have more fluid income, meaning that they can invest in local or regional businesses. While the state doesn’t gain much through taxation, it makes up the shortfall through charges and fees to corporations that individuals invest in.
Smart investors will find it extremely easy to set up companies here and keep most of their taxable income unfettered for investing in other enterprises. It’s this favorable situation that led to many high-income individuals moving to take advantage of the great tax rates. Businesses, especially those in the financial and real-estate industries, have seen the benefits that Florida could offer.
A Growing Commercial and Real Estate Sector
Financial firms have started moving to South Florida in a big way. Office space, like living space, is much more affordable in this locale, and many financial firms are seeing it fit to move their offices entirely to a new location. As most employees can work remotely, they can clock in from anywhere, leaving the business free to be mobile. It’s something that real estate professionals had expected but didn’t come to pass.
Florida passed a change to the State and Local Tax (SALT), leading many real estate investors to consider that they may see a surge in migration to the state. It turns out, the wave wasn’t caused by the reduction in taxes but rather by the pandemic.
Real estate in Florida is seeing a rebirth, one that many experts in the industry failed to predict accurately. In July of this year, many real estate pundits were looking at the companies that had planned to move to Florida but then changed their minds because of the pandemic situation.
They argued that the price of homes in the region were likely to drop since fewer people would see the benefit of moving out to Florida in the midst of a pandemic. However, recent figures have shown that Florida’s real estate industry is more than alive and well. Low interest, high demand, and low inventory create the perfect mix for a rapid-growth industry. It’s become so much of a boom that now investors are worried that a crash is looming.
Many people saw Florida as a respite from the cramped conditions of northern cities and fled to the sunny beaches to escape the clutches of the pandemic. However, as the situation got worse up north, Florida remained one of the better places to hole up until it all blew over. The economy was still in full swing, rents and properties were affordable with attractive interest rates on mortgages, and the beach was always nearby. With such a draw, it’s easy to see why Florida was one of the first places people attempted to run to when the pandemic hit.
Moving Beyond COVID
The virus may be a reason for people to move to Florida, but it won’t last forever. However, while it might have been the push many needed to move here, they may choose to stay for different reasons. Most people who move to South Florida state that they decided to move here for three primary reasons: access, lifestyle, and taxes. Florida can boast that it’s one of the nicest places in the world to live, not just because of its sun-kissed shores and its friendly people. It also is among the friendliest places for people trying to save money in tax payments because of its SALT changes.