Wealthy people tend to relocate to cities with lower and fewer taxes. This makes sense considering many wealthy people pay up to 37% of their income in taxes.
There are already 30 billionaires from Forbes’ billionaire list who either live or vacation in Palm Beach, and that number is growing. The Business Development Board reported that Jon Bon Jovi and Charles R. Schwab, among others, bought mansions in the city of Palm Beach in 2020. Home prices have risen by 36% and sales are up by 21%.
Florida has always been home to lower taxes all around, and doesn’t have a state income tax. However, this is just one reason the ultra-rich are moving to Palm Beach, Florida.
The latest reason the ultra-wealthy are on the move involves being targeted with higher taxes to make up for lack of government aid in the wake of the COVID-19 crisis. States are desperate for money and they’re attempting to get that money from the wealthy through new, higher taxes.
New taxes on the wealthy are driving them to relocate
In several U.S. states, new tax legislation has either been enacted or proposed that specifically targets the rich. For instance, New Jersey recently adopted a new tax for millionaires and Illinois is in the process of passing similar legislation. New taxes for the wealthy are being discussed in Connecticut, and according to Governor Andrew Cuomo, New York is next in line if the federal government doesn’t come through with financial aid for the state.
Real estate offers in Palm Beach have skyrocketed and many properties are being sold well above market value. The ultra-rich are not only moving their families to Palm Beach, but they’re moving their investment businesses as well. According to Chicago Business, 90% of people moving hedge fund operations to Palm Beach are from Manhattan, NY and Greenwich, CT.
Palm Beach retreats are turning into permanent homes for New Yorkers
Many New York residents were lucky enough to escape the state to their vacation homes in Florida before the travel bans were put into place. Those people are now working hard to move into their Florida vacation homes as a permanent place of residence.
Wealthy New York residents don’t want to get stuck in a high-rise apartment building if there is a resurgence of coronavirus and are making their escape to Florida as quickly as possible.
Those who don’t own property in Florida are buying up whatever properties they can find, seeing as the market is hot and homes in Florida are in short supply. According to Bloomberg, Miami-Dade home sales were up by 88% for properties listed at $1 million or more. Properties in Palm Beach that sat on the market without any interest have been bought and luxury homes are now scarce.
There are only around 2,500 homes on the island of Palm Beach. Approximately 7% of those homes are on the ocean and 11% are along the waterway. However, many homes, waterfront or not, sell for more than $10 million. Palm Beach is truly a destination for the ultra-rich.
Palm Beach isn’t just a retirement destination anymore
Millions of Americans dream of retiring to Florida and those with enough money make that dream a reality. Florida is the perfect retirement destination for those who want to be surrounded by sunshine, beaches, year-round warm weather, and an abundance of golf courses.
Both middle-class and ultra-rich Americans have been retiring to Florida for decades. However, certain areas in Florida – like Palm Beach – tend to attract the ultra-rich. For instance, best-selling author James Patterson owns property on Palm Beach and so does President Donald Trump.
Palm Beach is an island not too far from West Palm Beach, and offers a quieter retreat from society than other popular cities like Miami. You won’t find bustling nightlife on the island of Palm Beach, but that’s what residents want. The median annual household income of residents living on Palm Beach is $110,961. However, there are neighborhoods that only the ultra-rich can afford.
Palm Beach will soon become a thriving city year-round
Once the coronavirus restrictions are lifted, Palm Beach will become a thriving city thanks to the increase in residents. Until this point, business was somewhat seasonal as many people only used their Palm Beach homes as vacation spots or to get away from cold winters.
The biggest benefit palm Beach offers as a coastal town is high elevation. This makes the island more enticing since rising seas aren’t a concern like they are in other coastal towns.
Since many new Palm Beach residents are families, the town is also seeing a surge in private school enrollment.
Coronavirus or not, many people see that Palm Beach has much to offer now and in the future. Soon, Palm Beach will become a lively town year-round, and hopefully it will be able to retain the peace and quiet it’s been known for.