When Charlie Garcia first moved to Miami, it was easy to land a table at the hottest restaurants in town. But that was before the recent influx of the ultrawealthy.
“If you look at the number of billionaires who have moved to Florida, it’s off the charts. It’s causing issues,” Garcia tells Fortune. “Getting dinner reservations has gotten a lot more difficult.”
Miami has become one of the top U.S. destinations for millionaires and billionaires on the move: In the past decade, the millionaire population has grown by 90% in West Palm Beach and 75% in Miami, according to a 2023 wealth report from investment migration firm Henley & Partners. That puts them in the top four cities in the country; Miami is also home to the most millionaires, centimillionaires, and billionaires on the list.
But Garcia isn’t complaining. He’s a managing partner of R360, an exclusive community for ultrawealthy individuals and their families, who boast an average net worth of around $400 million. Over the past few years, the club has seen its membership based in Florida spike, Garcia tells Fortune, spurred partly by recent tax law changes in places like Washington state, which imposed a 7% capital gains tax in 2022.
“It’s not what you have or what you make, it’s what you keep,” says Garcia. “What you keep every year, what you keep when you die…what you keep if there’s a slip and fall in your house and they come after you for everything.”
And in Florida, the 1% can keep much more of their wealth than in a state like Connecticut, New York, or Washington that taxes estates and capital gains. Take Florida’s most famous recent billionaire transplant, Jeff Bezos, who left behind Washington, where he made his fortune, for Miami and is set to save some $600 million in taxes over the next year as he unloads Amazon stock.
The move comes amid a national conversation on whether to impose a federal wealth tax, or “billionaires’ tax,” something President Joe Biden has supported but Congress likely would not. With no movement on the national level, some states are imposing or proposing additional levies on the wealthy to fund social programs. Those include states with some of the nation’s wealthiest residents: California, Connecticut, Hawaii, New York, and Washington.
‘Other reasons to move’
Not only does Florida not tax capital gains, it has no state income tax or estate tax. That makes it ideal for the ultrawealthy who are considering estate planning, says Garcia. He expects more to move to the Sunshine State in the near future.
Of course, while the number of wealthy and ultrawealthy may increase in Florida and other low-tax havens like Texas, New York—with its estate tax, state income tax, and more—remains home to the most millionaires and billionaires in the country by far—and remains the richest city in the world. Though some wealthy are moving out, Henley & Partners reported it saw a 40% increase in high-net-worth residents over the past decade. The Bay Area, Los Angeles, Chicago, and Houston round out the top five American cities with the most high-net-worth residents.
That’s because few people move solely for a tax break, says Barbara Goodstein, another managing partner in R360’s New York office. Plenty of members, she says, still see great value in being in a place like New York, whether it’s because that’s where they started their business or to be close to family.
“The laws aren’t going to cause people to move if there aren’t other reasons to move,” Goodstein tells Fortune. “They’re not just going to move to save some money down the road after they die; it’s a much more complex decision.”
That said, as Garcia alluded to, there are plenty of other attractions in Florida, including the warm weather, housing, and cultural attractions. For the latter, there’s the art and food scenes, of course, but also the relatively new Miami International Autodrome for Formula One races and the draw of a footballing legend.
“They got Messi,” Garcia jokes.
Source: Fortune.com
