The Florida Boom: Driven By Low Corporate Taxes and Attractive Real Estate
During the start of the 1920s, the American economy soared, as thousands of Americans looked towards the implementation of progressive laws, and the lowering of taxes. Florida at the time experienced the largest human migrations in American history. Bigger than the Gold Rush in the West, Florida was the Vegas of the South – before there was even a Vegas.
Fast-forward 100 years later, and the Florida migration rush is still happening. Changes in tax regulations, and an attractive real estate market has captured the attention of America’s elite and wealthy. As more and more people are looking to make the move to the Sunshine State, Florida has become an elite sanctuary, where the rich can receive a massive tax break, while busking away on the million-dollar properties. Today, Florida may not provide the most ideal shelter to corporations when it comes to G7 and OECD tax fixing on a global scale, but it still has advantages.
Want to be part of the boom? Here’s a look at how Florida is keeping the momentum going, and offering attractive incentives for the rich.
Low Corporate Taxes
Just like Montana, Nevada, Wyoming, Alaska and New Hampshire, these states, the same as Florida, share the same ideal – keep taxes low, to drive up the state economy. It’s a tricky equation that needs proper evaluation to ensure it works properly. But these states, and many others, have been monitoring corporate income taxes, keeping percentages low to help develop overall state economic growth.
Research revealed that 99% of Florida businesses pay no corporate income tax. At the moment, the Florida corporate income tax rate is 5.5%, minimizing the amounts big businesses and corporations will need to pay annually. Keeping these figures low have created a “haven” for some businesses seeking a tax break. Many in the sphere that supports low tax rates claim that these legislations incentivize businesses, in some way.
So where does Florida get the money from then for basic government services? Well, the scales are a bit tipped here, with the bottom 20% of low-income families earning less than $18,700 per year paying 12.7% of their income to the state. Moreover, Florida collects taxes through sales tax (6%), electricity sales tax (6.95%), gas tax (42,29 cents per gallon), and other taxes such as cigarette tax, hotel tax and property taxes.
Florida has kept its economic momentum for decades, offering business owners and large corporations an attractive incentive. Conducting business within the state has helped drive up local job markets, and helped improve the livelihoods of millions.
The Real Estate Market
Perhaps you’re not in the market for tax breaks, but rather high-end valuable property? Well, this is where you’ll find some of the most attractive real estate deals in America. In recent months, the South Florida property and real estate market has boomed, as more and more businesses are looking to relocate to Class A property in Southern suburbs.
Miami, St. Petersburg, Jacksonville, Tampa, Tallahassee and many others are becoming real estate hot spots for wealthy property investors. Property prices are selling at an above-average asking price, with counties such as Miami-Dade seeing a 21.6% increase in house prices compared to last year.
The Florida property market is healthy, really healthy. But this has begged the question if real estate and commercial property isn’t becoming too overpriced? It’s a gamble. Some realtors and brokers will sell your property at market value, while property in more affluent areas will go above market value price.
Additional state legislation on property taxes has also been a spark behind the recent property boom. According to the Florida Constitution, all revenue obtained through property taxes are set for local government use. Value increases are limited to only 3% per year. Meaning that property taxes will only be based on the actual value of the market value.
This “save our homes” cap is an initiative instated by the Floridian government to drive market value, and ensure residents will keep their homes, even in an economic crisis.
As Christopher Knowlton said Florida is a “Bubble in the Sun.” A place where a Florida registered agent looks to become your friend and find you a solution to your tax problems. Florida is to this day a “Bubble in the Sun,” offering attractive local government incentives for businesses and pushing property values to new heights.