What it means
Florida does not tax personal wages, retirement income or investment income at the state level. Residents therefore keep more of their income compared with states that have a state income tax.
The state funds itself largely through sales taxes, tourism-related taxes and property taxes at the local level.
What you still pay
You still pay property tax on real estate, sales tax on many purchases, and homeowners or condo insurance, which in Florida is a major cost. Condo owners also pay association fees. Rental income can also have its own taxes, such as tourist development tax on short-term stays.
When comparing Miami with another state, compare the full monthly cost of living, not only the income tax.
Federal taxes still apply
U.S. citizens and residents are taxed on worldwide income at the federal level wherever they live. Moving to Florida does not remove federal income tax.
Non-residents are taxed on certain U.S. income, including rental income and gains on U.S. real estate. These rules are technical and depend on tax treaties.
Establishing Florida residency
Moving your tax residence to Florida is a matter of facts: where you live, spend time, register, vote and keep your main home. Buying a property alone does not make you a resident, and your former state may examine the move.
If you leave a high-tax state, keep records and ask a tax professional how that state views your move.
Foreign buyers
A foreign owner who does not become a U.S. resident gets no benefit from the absence of a state income tax on income from outside the U.S., and the home of such an owner may be subject to estate tax rules. Your home country may tax you on worldwide income and may have its own rules about foreign property.
Speak with advisors in both countries before you buy, not after.
Common mistakes
Assuming that Florida means no taxes at all, ignoring insurance and property tax, assuming that buying a property ends residency in another state and not planning for federal rules.
A final mistake is relying on a general article instead of an advisor who sees your whole situation.
Comparing with other states
If you currently live in a state with an income tax, estimate how much you pay now, then add Florida's higher insurance and association costs to see the real difference. For many people the saving is meaningful, for others it is smaller than expected once insurance is included.
Checklist
Estimate your current state tax. Price insurance and taxes for the homes you like. Ask a tax professional about residency. If you are not a U.S. resident, speak with advisors in both countries about U.S. tax filing, estate tax and withholding on a future sale.
A practical tip
Ask your agent to show tax, insurance and fees in every comparison. Two homes at the same price can differ in monthly cost, and that payment, not the price, decides whether the purchase is comfortable.
Next step
We can help you estimate the full cost of owning in Florida and introduce you to tax and legal professionals for the rest. Lidiya Tretyak is a licensed Florida real estate agent with Douglas Elliman and speaks English, Russian and Ukrainian; the first consultation is free.
This guide is general information, not legal or tax advice. Laws and programs change — confirm details with a Florida attorney and a US tax professional.
