‘Wall Street South’? New York financiers decamping to Miami in droves, report says

by Joe Ward

South Florida developers and real estate professionals have capitalized on the federal tax reforms that hurt high tax states like New York and Connecticut by pitching Miami as an attractive, low-tax alternative. The work appears to be paying off, according to a new report from Bloomberg.

Florida has added tens of thousands of new residents that have decamped from the Northeast, and a surprising amount of them appear to be in the finance industry, Bloomberg reports.  The state has seen 14,600 Connecticut residents move to Florida from 2015 to 2016, the highest number since 1999. The trend has likely gone into overdrive since the new tax laws took hold, according to the report.

New tax laws now place a cap on the amount of state and local taxes (also known by the acronym SALT) that a person can deduct on their federal taxes. Such a cap is particularly burdensome on residents of high-tax states, where property tax bills alone can be well over $10,000.

After the new law went into effect this year, Florida officials have used it to lure hedge funds and other finance companies to the state. It has been so successful that some state officials refer to Miami as “Wall Street South” and Palm Beach as “Hedge Fund South,” according to Bloomberg.

“SALT has been the No. 1 theme when we speak with finance companies about relocating or opening branch offices in Miami,” Nitin Motwani, a lead developer of a $2 billion skyscraper in Miami, told Bloomberg. “Naturally, we are in favor of getting rid of that deduction, because it’s great for this market.”

From April 2017 to April 2018, florida gained 14,700 jobs in the finance sector. Among the notable companies moving to town: Connecticut-based Starwood Capital Group is moving to Miami beach by 2021 and I Squared Capital is moving from New York City to Miami this year.

To see the full report, click here.

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