No State Income Tax — But What Does Florida Actually Tax?

"No state income tax" is the headline that sells Florida. And it's true — Florida is one of only a handful of states that doesn't tax personal income. For high earners relocating from New York, California, New Jersey, or the UK, that single fact can mean saving tens or even hundreds of thousands of dollars per year. But the full tax picture in Florida is more nuanced than that one-liner suggests. The state still generates revenue, and if you're relocating here, you should understand exactly where that money comes from — because some of it will come from you.

Property Tax: The Big One

Florida's property tax rates vary by county, but they're broadly competitive with the national average — and significantly lower than what you'd pay in New York or New Jersey for a comparable home. The statewide average effective rate hovers around 0.80% to 0.90% of assessed value, though this varies meaningfully by municipality. In Palm Beach County, for example, you'll see rates that range roughly from 1.5% to 2.2% of assessed value depending on the city and the applicable taxing districts (school, fire, water management, etc.). On a $750,000 home, that translates to roughly $11,000 to $16,000 per year before exemptions.

Two things newcomers need to understand about Florida property tax:

First, assessed value is not market value. The county property appraiser assesses your home's value, and that assessed value may differ from what you paid. New purchases are often reassessed at or near the purchase price, which can mean a meaningful jump in taxes compared to what the previous owner was paying.

Second — and this is critical — the Homestead Exemption.

The Homestead Exemption: Don't Miss This

If you make Florida your primary residence, you're entitled to a homestead exemption that reduces your property's taxable value by up to $50,000. On top of that, the Save Our Homes provision caps annual increases in assessed value at 3% or the rate of inflation, whichever is lower — regardless of how much the market value of your home increases.

This is a genuinely powerful benefit, but only if you file for it. You must apply with your county property appraiser's office by March 1 of the year following your purchase. Miss that deadline, and you lose the exemption for that tax year. Every year you own the home after that, the cap on assessment increases saves you more money — which is one reason long-time Florida homeowners often pay dramatically less in property taxes than their new neighbors in comparable homes.

For families relocating from high-tax states, the homestead exemption and the Save Our Homes cap are among the most financially significant benefits of establishing Florida residency. File for it immediately.

Sales Tax: Higher Than You Might Expect

Florida's statewide sales tax rate is 6%, and most counties add a local surtax of 0.5% to 1.5%, bringing the effective rate in most of South Florida to between 6.5% and 7.5%. That applies to most tangible goods, restaurant meals, and many services. Groceries (unprepared food) are exempt, as are prescription medications. But the list of taxable services is broader than in many states — commercial cleaning, pest control, and certain professional services are all subject to sales tax. If you're coming from a state like Oregon (no sales tax) or the UK (where VAT is included in the sticker price), the adjustment is worth noting. It's not a dealbreaker, but it does add up — especially on large purchases like furniture, appliances, and vehicles when you're setting up a new home.

Documentary Stamp Tax and Real Estate Transfer Costs

When you purchase property in Florida, you'll encounter the documentary stamp tax — a transfer tax assessed at $0.70 per $100 of the sale price (in most counties). On a $1 million home, that's $7,000. In Miami-Dade County, the rate is slightly different. Buyers also pay for title insurance in Florida (this is customary in most counties, though in Miami-Dade and a few others, the seller traditionally pays). Title insurance on a $1 million purchase typically runs around $5,000 to $6,000. These costs aren't unique to Florida, but they're worth building into your budget — particularly if you're coming from a country like the UK where the transfer tax structure (Stamp Duty Land Tax) works very differently.

Tangible Personal Property Tax

If you're relocating a business to Florida, you'll encounter the tangible personal property tax — an annual tax on business equipment, furniture, fixtures, and other physical assets. Every business is required to file a return with the county property appraiser by April 1 each year, reporting the value of its tangible property. There's an exemption for the first $25,000 in assessed value, which covers many small businesses. But for larger operations, this is a real line item that should factor into your planning.

Estate and Inheritance Tax: Florida's Other Headline

Florida has no estate tax and no inheritance tax. For high-net-worth families — particularly those relocating from states like New York (which has its own estate tax with a cliff provision) or from the UK (where inheritance tax kicks in at 40% above the nil-rate band) — this is a major consideration.

Establishing Florida domicile can provide meaningful estate planning benefits, but it requires more than just buying a house here. You'll need to take deliberate steps to demonstrate that Florida is your permanent home — updating your voter registration, driver's license, vehicle registration, and estate planning documents. Working with a Florida-based estate planning attorney early in the process is strongly recommended.

The Comparative Picture

When you stack Florida's total tax burden against high-tax states and the UK, the math is compelling:

For a household earning $500,000 per year, the difference between Florida and New York in state and local income taxes alone can exceed $40,000 annually. Add in differences in property tax rates, estate tax exposure, and sales tax on everyday spending, and the gap widens further.

But Florida's tax advantages are not automatic. They require proper residency establishment, timely filing of exemptions, and in many cases, restructuring your financial and legal arrangements to ensure you're capturing the full benefit. This is especially true for dual-national families and those maintaining ties to other states.

What to Do First

If you're serious about relocating, put three things on your immediate checklist: consult with a CPA who specializes in multi-state or international tax planning, file for your homestead exemption the moment you're eligible, and work with a local attorney to update your domicile documentation. The tax benefits of Florida are real and substantial — but only for those who take the steps to claim them.

Relocating to Florida and want to make sure you're set up correctly from a tax and residency standpoint? Reach out to Adam Jacobs at adam@jacobsrelocation.com — he connects relocating families with the right local professionals to make the transition seamless and financially sound.