English moving to SD- help with understanding costs (Los Angeles, San Diego: sales, real estate)

[Englishrose123]

Hi there,

We are an English couple living in the Middle East. My husband has just been offered a transfer to California and we are trying to understand costs in order to make a decision about whether or not to move. We can move anywhere in California as he will be working from home. We have to be near a large airport that's all. San Diego seems like it would be good as it's a little cheaper than LA or SF but we still get to live in or near a big city.

If we move to California I will stop working to hopefully have kids. He will be earning the same amount as he is here. Our plan is not to save money in California, but to cover our costs and continue to live at the same standard we've become accustomed to here. I'm finding it difficult to figure out what our net monthly income would be after taxes. Can anyone help?

We would rent initially- and it seems like it's going to cost us a lot to get something similar to what we have here- approx 4000-5000 USD/month. We'd like at least 3 bedrooms/ 1800 sq ft. Have done some research into the nicer areas and the rents seem to be about the same. I'd love to be on the coast (please don't hate!).

How much would property taxes be? Do you have to pay them on rentals? How about utilities? Are cars/groceries/clothes/eating out/ furniture/cleaners etc. comparable to the East coast? (Say Washington DC suburbs? I've spent quite a bit of time there)

Any other costs I need to consider?

Thanks so much in advance.

Rose

[moved]

It's not Cali, it's California.

[RosieSD]

Hi Rose,

You should find plenty of very nice choices within your rental budget - no problem.

Renters don't pay property tax. They do usually pay for electricity, internet, and cable TV separately. Other utilities (like water) are usually included in the rental price.

Prices here are comparable to Washington D.C. -- a little less on some things, a little more on others (especially gasoline). I think clothing is a bit cheaper if you have kids because you don't need to buy new winter gear for kids each year like you do on the east coast.

In terms of income taxes, if you are domiciled in California, you will have to pay state income taxes (see: https://www.ftb.ca.gov/individuals/f...esidents.shtml). It would be impossible for strangers on the internet to give you a good estimate on what your take home might be, since income taxes are dependent on so many variables. So, I'd suggest it's best to consult with a California tax accountant or attorney to get a reliable estimate if taxes are central to your decision.

Be aware that while we have a modern, large airport with many flights daily, we do not have as many direct flights to other parts of the U.S., Europe, and Asia as LA and San Francisco do, so that might be something to consider if your husband needs to travel frequently.

I'd choose San Diego over San Francisco or Los Angeles any day (and have for the past 30 years). I moved here from New York City, and find it is a very different lifestyle. Although population-wise we are larger than San Francisco, we do not have the urban feel that many major US cities have. San Diego (which most of us use as the term for the entire County, not just San Diego proper) is best described as a series of suburban neighborhoods with a smallish downtown urban core. But, I've found San Diego to be a great place to live and raise a family for just that reason.

Of course, only you and your husband can decide if this is the right place for you and your family. If you can, come visit before making your decision and see if it is what you are envisioning.

[USDefault]

Originally Posted by Englishrose123

I'm finding it difficult to figure out what our net monthly income would be after taxes.

In California, less, as this state has among the highest income taxes and sales taxes in the United States. If you are a high income couple, you should consider it. It could be tens of thousands of dollars per year. California tax brackets. States vary in their income and sales taxes, from zero to California's sky-high rates. This is different from U.S. federal taxes, which will be in addition to California's taxes.

[someguy10]

As others have mentioned, to get from gross income (typically salary + any bonus) down to net income, you need to subtract federal taxes (you'd pay essentially the same in any US state) and subtract state income taxes. In some places, you may also have local (city taxes) taxes. I've never seen a case where renters pay real estate taxes (of course RE tax rates affect rents).

For federal taxes, check out: https://turbotax.intuit.com/tax-tool...ors/taxcaster/ . It's no CPA substitute, but it's always been very close for me.

Take the taxable income line from above and then apply one of the various state income tax calculators or charts (e.g., State taxes: California). Note that "taxable income" is usually a little different between fed and state, but we're just estimating here.

As others have pointed out, CA income taxes are perhaps the highest in the country. Some states such as Florida have zero state income tax. For high earners, this difference can become significant quickly.

I think it's silly to plan on a pure break even budget that doesn't save anything, especially if you are thinking of starting a family. If you already have a large cushion of cash or cash equivalent, then this is a little less of a concern.

You should be able to get your housing needs for closer to $4k/mo. Hopefully the extra $1k/mo (you mentioned a rent range of 4-5K) would offset extra state income taxes.

One thing to be aware of is that CA expects its residents to pay those high state income tax rates on ALL income, regardless of where it's earned. I'm not sure how this applies to foreigners, but it is definitely something to consider if you have substantial income or assets abroad.

[AADAD]

Originally Posted by moved

It's not Cali, it's California.

Whatever.

[Englishrose123]

Thank you so much RosieSD, USDefault and Someguy10. Super helpful answers.
The tax calculators in particular have been very helpful, we're able to get a rough idea of what we'd pay, however we'll also get a tax guy to run a prediction for us.
Someguy10- we have been socking away money for a while so we have a very nice cushion, otherwise I would agree with you 100%.
We're going to come out soon and do a recce anyway.
RosieSD- good point regards flights. I checked with him and he'll mostly be doing domestic West Coast and SouthWest so he wasn't concerned. Thanks.
Thanks once again, I'm sure I'll be back with more questions at some point!