If you have been thinking about making Florida home, but are still weighing the pros and cons let us help you add a few pros to the list. There are a lot of financial benefits to becoming a Florida resident and making Florida your “domicile state.”
What DoES DOMICILE MEAN?
Having “domicile” in a state refers to the place where an individual (or married couple) retain their permanent home and the place they expect to reside permanently. Your domicile state determines what state you pay taxes to and can make you eligible for state programs and benefits. Residents in all states are subject to federal income tax, but Florida residents benefit from no state income tax, estate tax, inheritance tax or intangible tax. What does that mean? It can mean tax savings in the thousands! Savings from IRA withdrawals, annuity and employment income and pensions.
Residents in Florida can also take advantage of property tax savings and Florida homestead creditor protection. If you purchase a property in Florida and make that your homestead with the property tax assessor, it could lead to a reduction in the taxable assessed value of your home. Additionally there is the Save Our Homes Act, which exempts $50,000 from a property assessed value from taxation. This benefit also limits the increase in your home’s assessed value to no more than 3% increase per year. There are even ways to transfer this benefit even if you sell your home and acquire a new one.
Steps to take
To successfully change your domicile to Florida, here are a few steps that should be taken:
- Establish a Residence
You must obtain a residence in Florida. That can be a purchased home, duplex, condo or rental property. You also must establish intent to remain permanently at this residence. Spending 183 days in the state can help establish residency but is not the only step that needs to be taken. If you purchase a home rather than rent, you can apply for the homestead exemption and you can take advantage of real estate benefits.
- Obtain a Florida Driver’s License
Transferring your driver’s license to a Florida one is a must. Updating your auto registration is also important. If you carry professional licenses having those updated is a great idea as well.
- Change Your Address
Updating your new address as your mailing address on forms and documents that require listing a residence is essential. This is imperative on state and federal tax returns.
- Maximize Time in Florida
Spending time in your new state is important. Things like travel records, telephone usage and utility bills can be used to prove where you spend your time. Enjoy the weather and Florida lifestyle!
- File a Sworn Statement
States like Florida allow you to file a sworn statement in the office of the clerk of the circuit court declaring yourself as a resident of the state.
- Move Bank Accounts to FL Bank
If banking with a local bank without branches in Florida, establish a new account with a bank in state. If you are using a national bank, simply update your address and home branch.
- Register to Vote in Florida
Register to vote in Florida for upcoming elections both local and national. In fact you can request voter registration forms when getting a Florida driver’s license.
Taking steps to make Florida home could greatly benefit you in paying less taxes. If you do end up moving to our beautiful state, you should complete these steps to help eliminate a state tax audit. Additional steps can be performed and are listed in the resources below.
All in all we hope we have enlightened you on reasons to join us in the Sunshine State in addition to the amazing weather, lifestyle and beaches. If you need assistance in establishing residence in the state of Florida with the purchase or build of a brand-new home, we can help you! Our New Home Specialist team knows the Southwest Florida area well and can help you establish a home you can enjoy for years to come! You can view our floor plans here.