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Just thinking here- your post revolves mainly around the tax advantages of moving to NC from NJ- if that's the main or only point for your move (to reduce your tax burden), there are better states to do so. Texas and Nevada both come to mind, and there are others with far lower overall tax burdens as well. As you know, though, the decision to move from NJ to other areas if often driven by far more than just the desire to reduce tax burden.
I picked NC b/c my friend moved there so I'm most familiar with it, and it seems to be "the place" the past few years. I assume most people move there for the perceived financial benefits, the rest b/c of work.
The problem with your equation is your not moving far enough south...... You still have winter in the Carolinas......maybe a little less harsh than New Jersey but winter none the less. You want real savings to make the move really worth it then you have to move much further south. While saving money on taxes, etc.......wouldn't it be nice to have nice weather all year round..........no more "wintery mixes" to face......just weather nice enough to be able to plan to do some activity outside every weekend !!! Might be wise to factor Northern Florida into that savings equation ???
The one flaw in your math is in the "same mortgage" portion, IMO. For most people, who don't have a large amount of equity in their homes, if they were to come down here and buy a similarly sized home, their mortgage would be much lower due to the lower cost of the home. For example, lets assume you have a 2,500 sf home in Somerset or Hunterdon County that you bought within the past few years, that you can sell for what you paid, and get out with the DP that you put down (I know, that'd never happen in today's market, but let's say it did....lol). That house sells for maybe $450k, and if you were carrying a $400k mortgage, your monthly P&I was around $2,400.
Now, you come down here and buy a brand new 2,500 sf home in a suburb a similar distance from the city, and that costs $250k max. Assuming the same $50k dp, you've now got a $200k mortgage, which is $1,200/month, a savings of $1,200/month, or $14,400/year. Your current situation is unique because you have alot of equity in your home because you've been in it for some time, and you're also not factoring in the value of that cash you were pocketing in your original assumptions.
Wow- I wrote that and didn't turn it into an "NJ vs the south" post....lol
I know for some there's a larger benefit, but I'm not talking about them, I'm talking about me (because it IS all about ME).
I would never not have a mortgage, so even though theoretically I could buy a house outright with the equity from mine, I wouldn't do it. But let's say I do....my federal taxes would go up roughly $10K a year (because at that point, I'm not even sure I could itemize). But if I do carry a mortgage, I would pocket some money, but I'm not sure how to calculate that because that's what I'd be doing..pocketing it (not spending or whatever -maybe for retirement).
The problem with your equation is your not moving far enough south...... You still have winter in the Carolinas......maybe a little less harsh than New Jersey but winter none the less. You want real savings to make the move really worth it then you have to move much further south. While saving money on taxes, etc.......wouldn't it be nice to have nice weather all year round..........no more "wintery mixes" to face......just weather nice enough to be able to plan to do some activity outside every weekend !!! Might be wise to factor Northern Florida into that savings equation ???
I know for some there's a larger benefit, but I'm not talking about them, I'm talking about me (because it IS all about ME).
I would never not have a mortgage, so even though theoretically I could buy a house outright with the equity from mine, I wouldn't do it. But let's say I do....my federal taxes would go up roughly $10K a year (because at that point, I'm not even sure I could itemize). But if I do carry a mortgage, I would pocket some money, but I'm not sure how to calculate that because that's what I'd be doing..pocketing it (not spending or whatever -maybe for retirement).
I picked NC b/c my friend moved there so I'm most familiar with it, and it seems to be "the place" the past few years. I assume most people move there for the perceived financial benefits, the rest b/c of work.
OK glad you aren't moving. Then I will just come right out and say the parts we visited were not worth living in to save $3k, to put it mildly.
about tax advantages if I were to move to one of the "southern states du jour" - what would be the net/net? I took NC because that's the hot spot, I have a friend who recently moved down and it seems to dominate a lot of the forums. Granted, this was a very, very rough estimate..anything I may have missed please feel free to add (either way - I know you people won't let anything slide though ): *roughly* - I calculated we'd be saving about $3K a year than what we pay now.
That takes into account: higher state income tax in NC...
Whoa, not so fast! NC income tax may well be lower than NJ.
NC rates may be higher than NJ rates, but NC assesses tax on NET income (like the Federal). NJ assesses tax on gross income. Often, this results in the actual tax bill being higher in NJ.
For me, it's the difference between night and day!
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It's not only the tax rates -- net vs. gross
