“As far as taxes, I tell New York — beware.”
Those words of warning come from Douglas Eliman CEO Dottie Herman, a longtime New York City executive in the real estate industry. She said there’s a downside to levying too many taxes on high-tax states like New York and that the real estate market will suffer as a result of it.
“People will pay a premium to be here [New York] but then it gets to a point and there’s just that tipping point where it’s enough,” she told Yahoo Finance’s On the move, adding that we already have Baby Boomers flocking to warmer climate states.
In the 2017 Republican tax overhaul, federal deductions for state and local taxes, or SALT, were capped at $10,000. The tax, in part, has prompted a migration from places like New York, according to Herman.
Taxes combined with rising home prices and rent are too burdensome for many to bare. Census bureau data from 2018 shows approximately 200,000 residents left New York last year and the city leads all metro areas in the country as the largest out-flow of people with 277 leaving every day. That’s more than double the number last year.
Herman points to the multitude of taxes New Yorkers face, “You have a millionaire’s tax, a mansion tax, flip tax — it gets to be a point where it doesn’t make sense,” she said.
Despite this Herman says New York is still the number one place in the country for people to come, including foreigners and young people, and adds that it still attracts tech companies.
Yvette Killian is a producer for Yahoo Finance’s On The Move.