For many, Florida’s appeal goes far beyond its sunny skies. Favorable tax laws, estate planning advantages, and evolving personal priorities have made relocating to the Sunshine State not just a lifestyle upgrade, but a strategic financial decision. This guide outlines key considerations for individuals and families contemplating a move from the Northeast, from tax implications and domicile requirements to insurance needs and audit risk factors.
Tax Landscape: Understanding Your Potential Savings
Florida’s tax system is a primary driver for many relocation decisions, particularly for high-net-worth individuals and families. Florida has no state income tax, which means a resident’s earned income and unearned income, such as capital gains and dividends, are not subject to state-level taxation. In addition, Florida does not impose a gift, estate or inheritance tax, making it an attractive destination for those interested in wealth preservation over multiple generations. While Florida residents are of course still subject to federal level income and transfer taxes, the lack of an additional tax at the state level provides a meaningful benefit.
A comparison with high-tax Northeast states underscores the potential tax benefits of establishing Florida domicile.
| As of 1/1/2026 | MA | CT | RI | NY | FL |
|---|---|---|---|---|---|
| Ordinary Income Tax | Flat rate of 5% on most income, with a 4% surtax on income over $1.08M (2025) 1 | Graduated rates from 2% to 6.99% 2 | Graduated rates from 3.75% to 5.99% 3 | Graduated rates from 4% to 10.9%. Residents of NYC also pay local income taxes 4 | None |
| Capital Gains Tax | Short-term gains are taxed at 8.5%, while long-term gains are generally taxed at 5% 1 | Taxed at the same graduated rates as ordinary income, ranging from 2% to 6.99% 2 | Taxed at the same graduated rates as ordinary income, ranging from 3.75% to 5.99% 3 | Taxed at the same graduated rates as ordinary income, ranging from 4% to 10.9% 4 | None |
| Gift/Estate Tax | An estate is subject to tax if its value exceeds $2M. The applicable rate ranges from 0.8% to 16% 1
No gift tax | CT residents have a unified CT gift & estate tax exemption that is equal to the federal exemption ($15M in 2026). Lifetime gifts or estates that exceed this threshold are subject to a flat 12% tax and a $15M cap 2 | An estate is subject to tax if its value exceeds $1,802,431. The applicable rate ranges from 0.8% to 16% 3
No gift tax | An estate is subject to tax if its value exceeds the state level exemption, which is $7.16M in 2025. The applicable rate ranges from 3.06 to 16% 4
No gift tax | None |
| Inheritance Tax | None | None | None | None | None |
Non-Tax Considerations When Making a Move
While tax savings are compelling, there are many more factors that will impact your decision and ultimately, the new destination must be the right fit for you and your family.
Real Estate and Housing Costs
Florida’s real estate market offers diverse options, from urban penthouses to sprawling waterfront estates. However, it’s crucial to understand the nuances of the housing market. While the median home price statewide is generally lower than in many Northeast suburbs, prices of luxury properties in prime Florida markets such as Naples, Palm Beach, and Miami often exceed those in desirable areas of the Northeast.
Property Taxes and Insurance Considerations
Although Florida’s average effective property tax rate is lower than in Massachusetts, New York, and Connecticut, these savings can be partially offset by substantially higher homeowner’s insurance premiums due to risk factors. Therefore, it is essential for prospective buyers to obtain quotes for homeowners, flood, and wind insurance before purchasing property. Coverage for motorized vehicles and watercraft, including golf carts and boats, should also be obtained.
Florida does provide a notable advantage for permanent residents through its homestead exemption, which reduces a primary residence’s taxable value by up to $50,000. Additionally, the “Save Our Homes” cap limits annual increases to the assessed value of a homesteaded property to the lower of 3% or the change in the Consumer Price Index. This benefit offers savings as well as tax predictability over the long term. In addition, Florida homeowners may be eligible to transfer their accumulated property tax benefit from one homestead property to another thanks to a provision called “portability.”
Changing Your Domicile and Managing Audit Risk
If you decide to relocate to Florida, simply buying a home there is not sufficient to relinquish your prior domicile for tax purposes. This is especially true if you are moving from a high-tax state, many of which pursue aggressive audits of former residents to determine if they have truly cut ties with the state.
To avoid scrutiny, you must demonstrate a genuine intent to make Florida your domicile, which is a legal concept rooted not only in state of mind but action. You must establish that Florida is your true home and the center of your personal and financial life.
There are a series of legal and administrative steps that demonstrate a person’s intent to establish a Florida residency:
- Purchase or lease a primary residence in Florida.
- File a Declaration of Domicile in a Florida county.
- Maintain a detailed physical presence log.
- Spend more than 183 days a year in Florida.
- Obtain a Florida driver’s license and register vehicles.
- Register to vote in Florida.
- Sell or rent your former home as the strongest evidence of intent. If you are maintaining it long-term, consider moving it to an irrevocable trust and leasing it back on a seasonal basis.
- If applicable, file a nonresident income tax return in your former state.
- Close primary bank accounts and open new ones in Florida.
- If you receive Social Security benefits, notify the Social Security Administration and have funds deposited into Florida primary bank account.
- Update all estate planning documents, including wills and trusts and powers of attorney, to reflect Florida law.
- Become a part of your new community: join local clubs and religious organizations, resign from social and community memberships in your former state.
- Update recreational licenses in former state to non-resident status.
- Relocate personal possessions, such as furniture and art, to your new residence.
- Celebrate holidays and family events in your new home.
- Establish new professional and personal relationships in Florida, including doctors, dentists, attorneys, accountants, veterinarians, etc.
Maintaining detailed records of your physical presence is essential. Domicile audits often involve detailed reviews of travel logs, utility bills, cell phone records, and credit card statements, with review periods stretching from three to six years. Even partial days in your former state or a layover at an airport can count against your residency claim. It is important to be aware of reporting requirements and work with an experienced tax advisor to ensure you are taking the proper steps to protect against an audit or defend your claim in the event of an audit.
Estate Planning: A Florida Perspective
Florida has state-specific requirements for some planning areas, so relocation requires a full review of your estate plan to ensure compliance with Florida law.
- Homestead Protection: Florida offers powerful homestead protection for primary residences, protecting them from judgment creditors. It also has specific rules regarding the devise (transfer by will) of homestead property. These rules can override bequests made in a will if they conflict with state law, particularly for married individuals or those with minor children.
- Trust Taxation: State laws govern how assets of “non-grantor” trusts (trusts that pay their own taxes as opposed to taxes being paid by the grantor) are subject to fiduciary income tax in a particular jurisdiction. It is important to work with your tax team to understand how trusts are taxed and whether there are changes that could be made to reduce or eliminate state taxation.
- Durable Power of Attorney: Florida law has specific requirements for Durable Powers of Attorney (DPOAs) to be effective. It is crucial to have a Florida-compliant DPOA to ensure your affairs can be managed without legal challenges.
- Personal Representative: Florida law has specific requirements regarding who may serve as the Personal Representative of an estate. When relocating to Florida, your will should be reviewed by a Florida attorney to ensure it complies with local law.
Next Steps: Planning with Confidence
Relocating to Florida offers meaningful tax and lifestyle advantages, but success depends on careful planning and execution. Overlooking small details can lead to dual residency issues, unexpected taxes, or missed estate planning opportunities. If you are contemplating a move from the Northeast to Florida, we recommend engaging the following advisors to support you throughout the process:
- Certified Public Accountants and tax advisors with multi-state experience
- Estate planning attorneys in both your current state of residence and Florida
- Insurance providers to evaluate Property & Casualty coverage
- Real estate professionals for a targeted property search
- Relocation services to streamline your move
- Financial advisors for holistic wealth planning
At SCS, we guide families through complex decisions with clarity and purpose. Our experienced team offers tailored advice and a network of experts to help clients achieve personal and financial goals.
- Massachusetts Tax Rates | Mass.gov
- Office of Legislative Research: Objective Research for Connecticut’s Legislature
- State of Rhode Island Division of Taxation
- Rhode Island exemption number is for 2025; inflation adjusted figure for 2026 is not yet available.
- New York Department of Taxation and Finance
Recent Insights
This article is intended for general informational purposes only and is not personalized tax, legal, or accounting advice. The tax, domicile, and estate planning considerations discussed herein are highly dependent on individual facts and circumstances and may change based on future law or regulatory guidance. Any decision to relocate, establish domicile, or implement related planning strategies should be undertaken only after careful analysis and in coordination with an experienced, multi-state tax advisor to ensure compliance with applicable federal, state, and local laws.
IMPORTANT DISCLOSURES
The views expressed in this document, and the description of data supporting these views, are those of SCS Financial Services (together with its affiliates, “SCS”). The materials contained herein do not constitute an offer to sell or a solicitation of an offer to buy any security. Any such offering or solicitation can be made only by means of delivery of a definitive Confidential Private Placement Memorandum (“Offering Memorandum”) which sets forth in detail the terms and conditions of the offering and the applicable risk factors and should be reviewed in its entirety prior to investing. Securities may not be offered, sold or delivered to any prospective investor who does not satisfy certain minimum financial and sophistication criteria, or in any jurisdiction in which such offer is not authorized. SCS does not provide tax, accounting or legal advice and prospective investors should consult their professional advisers as to the tax or legal consequences of any potential investment.
The information in this document is as of the date indicated and is subject to change without notice. In preparing this document, SCS has relied upon certain information provided by third parties without independent verification of the accuracy or completeness of such information and SCS accepts no liability for any direct or consequential losses arising from its use.
Forward Looking Statements
Certain statements contained in this document may be forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements that reference past trends or activities should not be taken as a representation that such trends or activities will necessarily continue in the future. Any economic or market forecast presented herein reflects the judgment of SCS as of the date of this material and is subject to change.
Risks
All investments risk loss of capital and there is no guarantee that an investment will achieve its investment objective. Private Fund investments in particular involve significant risks and are intended for experienced and sophisticated investors. Some of the risks associated with an investment in Private Funds include: (i) use of leverage or other speculative investment practices, (ii) illiquidity of investments including restrictions on transfers, (iii) potential multiple layers of fees and expenses, and (iv) lack of comprehensive regulatory regime. For a complete description of the risks associated with such investments please review the “Risk Factors” and “Conflicts of Interest” sections in the relevant Offering Memorandum.
Performance and Fees
Performance for the most recent time period presented may be based on estimated returns and is subject to change. Performance of individually managed accounts will vary based on constraints, timing, funding levels and other factors and may be lower or higher than any performance shown herein. Past performance is not a guide to future results.
Andy Janfaza Joins SCS Financial as Managing Director, Private Client Group
Tim Connor Joins SCS Financial as Managing Director & Co-Head of Focus Investment Partners
SCS Investment Partners’ Carlson On Private Equity Investing