Why South Florida is Ripe to Attract the Wealthy — and Their Advisers

Raul A. Garcia, a CPA and principal in the financial services department of Kaufman Rossin, outlines reasons why the wealthy and their advisers should move to South Florida.

As investors and investment managers know, timing is everything. And the time to consider a move to South Florida is now.

The continued economic growth of countries such as Brazil, Colombia, and Chile, has had an unbelievable side effect on South Florida: South Americans love to shop in Miami. Shopping eventually turns into purchasing homes as the attraction of the drastically improved amenities and new opportunities lure them in one by one.

The South Florida real estate market was not predicted to rebound until 2016, but it is turning around much quicker than expected, largely because of foreign buyers hailing from Latin America and Europe.

The median sales price of condominiums spiked 27.5 percent in August from a year earlier while single family homes are up 20.5 percent, the Business Journal reported.

There have even been sightings of the unofficial state bird, the “Miami (Construction) Crane” dotting the beautiful Miami skyline.

The amount of dollars flowing in from overseas is astonishing. More and more affluent South Americans and Europeans are making South Florida their permanent home.

Whether it’s because of distrust in their home country’s political regime, economic uncertainty, tax advantages or simply the weather, South Florida is experiencing significant growth in its millionaire population.

Five South Florida cities have made Forbes’ list of America’s millionaire capitals. Wealth managers have already started to flock south. Last year alone, several wealth advisement firms opened offices or expanded their teams in Miami and the surrounding areas.

A key factor for high net worth individuals to consider is state income tax -– an issue in all but seven states.

As the long-term capital gains tax increases in 2013 from 15 percent to 20 percent and other potential tax increases at both the federal and state/local levels remain on the table, any prudent personal financial planning must consider taxes. Should carried interest be taxed at ordinary rates in the future, wouldn’t an investment manager consider controlling some of the income tax burden by moving to a state such as Florida with no personal state income tax?

Creation of an individual state income tax is prohibited by the Florida constitution unless residents vote to reverse this policy; therefore, it’s doubtful it will ever happen in our lifetime.

So what does this all mean? South Florida is HOT! (And I’m not just saying that because I am a native Floridian.)

For all of the reasons above, now is the time to consider the move.

And let’s not forget the weather. If you are one my friends who live in the frozen tundra, a move to South Florida will make obsolete half or more of your wardrobe. Median temperature in February is 68.5 degrees while the median temperature in New York is 35.5 degrees.

Ready to move yet?

If you’re still not convinced, remember, South Florida’s proximity to Central and South America facilitates business with the region. Being able to meet foreign executives and entrepreneurs while playing in the land of fun and sun is akin to -– and sometimes literally involves -– discussing business deals on the golf course … even in winter.

Raul A. Garcia, CPA, is a principal in the financial services department of Kaufman Rossin, one of the top CPA firms in the country. He handles both audit and tax engagements for clients in a variety of industries.

Read about this South Florida investment article at bizjournal.com/southflorida.