The calls come every
week from luxury home buyers, and most of them start out the same way.
“I’ve been talking to my
accountant,’’ the callers say, many from tax-heavy states like New York and
California, “and they tell me it’s time to become a resident of the state of
Florida.’’
The recent wave of high
net worth buyers has sparked a boom at the top end of the Miami real estate
market. A recent study — the Coldwell Banker Previews International Luxury
Market Report — showed that outside of New York City, Miami is the country’s
busiest locale in the million-dollar-plus market.
Often, it is also just a
matter of dollars and cents. There is no state income tax in the state of
Florida, which saves high-end buyers a fortune in taxes alone. This favorable
tax environment is a huge draw for buyers from the Northeast and California.
“The taxes on inheritances
and estates are very high in some states, like California,” says Duff Rubin,
regional senior vice president of Coldwell Banker Residential Real Estate,
Southeast region in Florida. “Florida is one of the most attractive places to
live from a tax perspective, so we get quite a few people who decide to live
here for at least six months and a day each year. People are saying, ‘I want
this money to go to my kids instead of to pay taxes.’”
We know we have it all
here — the great Miami lifestyle, a favorable tax environment, tropical weather
and an abundance of choices for the perfect place to live. Affluent buyers from
all over the world want to be here and their presence has been a true driver in
the luxury market.
What’s different today
from the past is that high-end buyers now are considerably younger than they
once were. They’re not waiting until they retire or sell a business to move to
South Florida any more. Many are coming to live here permanently and are
bringing their businesses with them or starting new businesses in Miami.
The work-life balance
has become increasingly important to the younger demographic who have flocked
to Miami, the city that embodies this equilibrium. Advancements in technology,
transportation and communication make it easier for these young executives to
conduct business worldwide while enjoying Miami as their home base.
This immigration of
young and successful professionals willing to pay top dollar has undoubtedly
affected the real estate market, and their impact will continue to thrive as
they do. Their real estate purchases will follow the same upward trajectory as
their careers, as the successful young executive who has a home on 100 feet of
water will want to be on a guarded island with 200 feet of water next, and so
on and so forth.
Younger buyers also do
not plan to live in the same home for 20 or 30 years like their parents did.
One of the most illuminating statistics from the Coldwell Banker Previews
International Luxury Market Report is that 73 percent of those under age 35 say
that they expect to buy a home in the next 12 months, which is a dramatically
different percentage compared to other age groups surveyed in the study. Only
49 percent of 35- to 44-year-olds, 26 percent of 45- to 64-year-olds and 11
percent of the over-65 group expect to purchase a home in the same time period.
The younger, affluent
buyers in the luxury market want brand-new, modern, technologically equipped
turnkey products, as do the foreign buyers. Developers saw this trend and
reacted quickly to accommodate the needs of this new buyer demographic. As the
presence of South American buyers has decreased, this younger, successful
domestic buyer has stepped in to make a major impact in the luxury segment.
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