How Florida’s Tax Benefits Can Save You Money: A Guide for Future Residents
Have you been considering making the move to Florida, but wonder what the state taxes look like? There are lots of advantages that can impact your finances, so let’s dive into everything you need to know. From property taxes to income tax—or the lack thereof— is why so many people are choosing to call Florida home (almost 650,000 people made the move in 2023 alone!). We’ll even explore the specifics of tax benefits in beautiful St. Johns County, Florida.
No State Income Tax: Florida’s Biggest Flex
One of the most compelling reasons people move to Florida is the absence of state income tax. Yes, it’s true…Florida is one of just nine states in the U.S. that doesn’t impose a state income tax – and one of 13 that doesn’t tax retirement income. Imagine this: you’re working, managing a business, or just simply enjoying retirement and you get to keep more of your hard-earned money than you would in other states like New York or California! What more could you want?!
Property Tax Savings with the Homestead Exemption
If you plan to buy a home in Florida, the Homestead Exemption is a game-changer. By declaring Florida as your permanent and primary residence, you can reduce the taxable value of your property by up to $50,000, significantly lowering your property tax bill.
In St. Johns County, property taxes vary depending on your location. For example:
- Communities like Shearwater and Durbin Crossing enjoy a lower tax rate of 12.54 mills.
- City districts such as St. Augustine have a higher rate of 18.7 mills.
Let’s break it down. On a $500,000 home in the county, your property taxes without the Homestead Exemption would be around $6,200 annually. With the Homestead Exemption, your taxable value drops to just $450,000, reducing your tax bill to approximately $5,775—a savings of $425 per year (which, may not seem like a lot, but trust me, it adds up). Additional exemptions, like those for seniors or disabled veterans, can further decrease your tax burden. Pair this with Florida’s Save Our Homes cap, which limits annual increases in assessed value to just 3%, and you’ll see long-term savings.
Tax-Friendly Retirement Benefits
Florida is a top destination for retirees and for good reason. The Sunshine State doesn’t tax pensions, Social Security benefits, or retirement distributions. That means you can focus on enjoying your golden years without worrying about pesky tax deductions.
In St. Johns County, eligible retirees can benefit from an additional Senior Homestead Exemption, which provides up to $50,000 more in savings on taxable property assessments. Plus, Florida’s lack of inheritance and estate taxes also ensures you’re able to pass your legacy to the next generation without added complications.
Understanding Sales Tax and Local Surtaxes
Florida’s statewide sales tax is 6%, but in St. Johns County, a local surtax of 0.5% brings the total to 6.5%. Although the tax is slightly higher, it helps fund important infrastructure projects and schools, contributing to the high quality of life the area is known for.
For those planning a big purchase, it’s important to keep in mind that a 7.5% sales tax applies to the first $5,000 of most tangible items, such as appliances or furniture. This is a small price to pay for living in one of Florida’s top-rated counties for quality of life and education!
Business-Friendly Tax Policies
Due to its attractive tax policies, entrepreneurs and small businesses love to call Florida home. The state has a low corporate tax rate of 5.5%, and pass-through entities like partnerships, S-corporations, and sole proprietorships are exempt from state income taxes. In St. Johns County, the business-friendly climate is evident, with rapid growth in communities like Ponte Vedra and Nocatee.
Why St. Johns County is a Top Choice
From its favorable tax rates to its thriving communities, St. Johns County offers exceptional financial benefits for residents. Whether you’re a first-time homebuyer, a retiree, or a business owner, understanding these advantages can help you make the most of your move.
Ready to Make the Move?
Florida’s tax benefits make it an ideal place to live, and St. Johns County takes those advantages even further. From no state income tax to property tax savings and retirement-friendly policies, the financial perks of living here are hard to beat.
If you have questions or want to learn more about making St. Johns County your home, reach out today. We’re here to help you every step of the way!