State income taxes tend to be a predominant determining factor when high-earners choose a place to live, but a study from RewardExpert, The Best States for High-Earners and Affluent Families, takes a holistic look at what makes a given location hospitable to high-income Americans.
The ranking accounts for 20 data metrics regarding real estate prices and trends, school quality, public safety, local sales taxes, and overall quality of life in addition to state income tax brackets, rates, deductions and exemptions.
“When most people hear the term ‘affluent,’ they may think of individuals or families that fall into the ‘one percent,’ says RewardExpert co-founder Vlad Tyschuk. “However, in order to ensure that this study is relevant and useful to as large a slice of the demographic pie as possible, we have purposely defined ‘high-earners’ and ‘affluent families’ to exclude incomes in and above the top one percent. While the balance of our analysis remains valid and applicable to top earners, we assumed individual or household incomes within the top 2 to 25 percent. This roughly covers individuals earning $125,000-$250,000 per year, and families with household incomes ranging from $200,000 to $500,000.”
Florida ranked fourth nationwide. In picking out the top reasons for the rank, the study cited:
No state income tax.
Rebounding home values, noting that “property values in Florida are up by 1.03 percent from early 2008, and up by 9.57 percent in the past year.”
A low effective property tax rate of 0.82 percent and “generous homestead exemption amounts.”
Public schools ranked fourth-best In the U.S. with 171 gold and silver medal schools.
The top three states ranked for high-earners are:
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