It’s Tax Day in the United States, a day when many Americans begrudgingly cut a check to the Internal Revenue Service and make plans accordingly for the following year, ensuring that next year’s check doesn’t hurt so badly.
This year on Tax Day, we’re observing how tax minimalization strategies have shaped the Miami area, which has become a magnet for the ultra wealthy in the recent past. This has changed the landscape of the Magic City, creating both opportunities and challenges for locals and transplants alike.
The Billionaire’s Playground
Each year, Douglas Elliman and Knight Frank release The Wealth Report, an exclusive and comprehensive report on the lifestyles, buying and investing habits of the global elite and this year’s report reflected what we have seen first-hand. Miami is a Billionaire’s Playground. In fact, Miami’s millionaire population has surged by 75% in a decade.
This influx of immigration from UHNWI (ultra high net worth individuals) is not by accident. It is largely an immigration to chase the significant tax advantages that Florida offers. Most notably, the Sunshine State does not charge a state income tax, capital gains tax or estate tax, a marked advantage to states such as New York, California and Washington.
In essence, we are a bona-fide financial haven. Pair the tax advantage with the lifestyle offered in South Florida, the warm climate, cultural offerings and a literal candy store of luxury real estate, and you have an official Billionaire’s Playground.
Rendering of Bentley Residences Sunny Isles Miami
Miami In The “Best Of” Lists
While Miami has never been a stranger to “Best Of” lists that are routinely published, this year has been an anomaly as area neighborhoods have comprised 5 of the Top 10 Most Expensive Neighborhoods in the United States according to Bloomberg.
Coral Gables’ waterfront enclave of Gables Estates has even pummeled Beverly Hills in order to snatch the top spot with an average home value clocking in at over $21 million. Other notable list-makers were Old Cutler Bay, also in Coral Gables as well as Miami Beach’s San Marino Island, Palm Island and Rivo Alto Island.
Rendering of Six Fisher Island Golf Club
Sun, Safety – And Seriously Low Taxes
None of these changes have been by accident. Governor Ron DeSantis has long boasted about the low-tax benefits of being a Floridian, as has former President Donald Trump. The Trump Administration’s tax bills allowed many who moved to Florida from California or New York the ability to slash their federal tax bill by around 10% overnight.
Another tangible example of the fiscal benefits of being a Miamian include Jeff Bezos’ highly publicized move from Seattle to Miami earlier last year. Not only did he and fiancee Lauren Sanchez go on a buying spree on Indian Creek Island, he also saved a reported $600 million in taxes on his sale of $2 billion in Amazon stock just because the sale was logged in Florida.
Jeff Bezos 12 Indian Creek Drive Entry
Not only is the area fiscally freeing, South Florida has been reported to be far safer than the higher-taxed areas where the wealthy are moving from. Possibly the most widely publicized Miami move of recent years has been hedge funder Ken Griffin’s move of his entire Citadel firm to the Magic City. While the tax advantages were there, they were not the primary reason for his move.
Mr. Griffin reportedly decided to pull the trigger on the relocation after rampant rioting, one of his employees being stabbed and his own car being hijacked in Chicago. Enough was enough and away he went with his entire company in tow.
Now that they have set roots and settled in, Griffin also cites the rich culture and diversity we offer. This is something we pride ourselves on and are so glad that it continues to be recognized.
Moving Forward
It doesn’t seem that any end is in sight with the migration of wealth to Miami and we are glad for it. Yes, the private schools and other infrastructure offerings are experiencing growing pains but this is something that will sort out as we move forward.
All-in-all, it is a good day to be a Miamian.
If you, or someone you know, are interested in purchasing luxury real estate in Miami and/or Miami Beach, please contact Broker Michael Light, Global Ambassador for Knight Frank, Executive Director of Luxury Sales at Douglas Elliman and a member of its elite Sports & Entertainment Division.
Michael has over 15 years of experience working with influential buyers from all over the world and is an expert on educating buyers on market statistics and trends. You may reach Michael directly on his cell phone at (786) 566-1700 or via email at michael@miamiluxuryhomes.com.
