Washington state is experiencing a notable migration of high earners to Florida, driven by the impending implementation of a new 9.9% income tax on annual adjusted gross income above $1 million, set to take effect on January 1, 2028, with initial returns due in April 2029 [1]. Margit Brandt, a luxury property specialist, highlighted that Florida's 0% income and capital gains taxes are attracting wealthy individuals from Washington, where capital gains are taxed at 7% for the first $1 million and 9.9% above that threshold, though real estate is exempt [1]. Brandt emphasized that these relocations are not hypothetical, citing closed transactions involving high earners from Washington establishing new lives in Florida [1].
The new tax law, passed by the Democratic-controlled Washington Legislature and signed by Gov. Bob Ferguson, marks a significant shift for a state previously without an individual income tax [1]. The legislation is already facing a court challenge regarding its constitutionality, but real estate insiders report that the law is already influencing relocation decisions among wealthy residents [1].
A recent survey by the Association of Washington Business (AWB) found that 24% of respondents are considering moving their businesses out of Washington, up from 17% in the previous quarter and nearly triple the rate from 16 months ago [1]. Additionally, 55% of surveyed business leaders are considering moving their personal residence to another state, with the figure rising to 67% in Spokane County, which borders low-tax Idaho [1].
South Florida has become a popular destination for billionaires and corporate headquarters, supported by tax advantages and a thriving finance and tech sector [1]. High-profile departures include Jesse Proudman, founder and CTO of Venice.ai, who cited an increasingly hostile business environment in Washington as his reason for leaving [1].
CONCLUSION
The introduction of Washington state's new millionaire income tax is prompting a significant migration of high earners and business leaders to Florida, where tax policies are more favorable. This trend is already reflected in closed real estate deals and increased interest in relocation, suggesting a potentially substantial impact on both states' economies and real estate markets.