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Tons of retired people here in New York do this and as far as I know it's perfectly legal (as you said). They have a residence in NY and a residence in Florida or wherever, and they make their Florida address their official address while in reality they still live in New York for at least part of the year (usually the summer months). The NY home then becomes a "vacation home" for tax purposes.
Honestly, I think it's the optimal solution to get around NY's high cost of living and still be able to maintain strong ties with their friends/family, their native land, familiar surroundings, etc. My parents plan on doing this in several years. One day, in 30-40 years or so, I will be retired and probably doing the same thing as well.
It is legal, but a homestead (FL) or STAR (NY) property tax exemption can only be held in one state. We made FL our primary residence this past year and had to provide a written letter from our local NY tax collector stating we were no longer receiving NY's exemption. There is no double dipping, legally.
There is no tax advantage to a vacation home in NY. The only break we get is that our trash bill is reduced for when we are gone, but only after we submit a written request that gets approved by the village.
A new wrinkle in residency has popped up for coastal communities this year. FEMA has instituted a yearly surcharge on all home flood insurance policies, effective this year. $25 for residents and $250 for non-residents.
On our FL county website there is a hotline phone number to report anyone that may be committing property tax fraud. If the state doesn't catch them, disgruntled neighbors or relatives can turn presumed violators in.
As long as they do not stay long enough to become a resident then no state income tax. they are likely to be resident of the state they have the PO Box in as stated.In Texas its only registered voter they go by for jury duty.
You can be selected for TX jury duty without being registered to vote. Many counties and municipalities pull from 3 databases. Only one database is registered voters.
Even with 180 day rule Remember what happened to Derrick Jetter who claimed he lived in Florida to avoid NY taxes.
Stuff like his HS Yearbook, personal belongings, Trophies, Photo Albums, Herilooms, car registrations, Collectibles distance to Employer all led to NY.
A fully furnished vacation home in Florida with no personal belongings or personal photos on the wall is obviously a second home.
1) I CAN imagine that people want to pay as little tax as possible.
2) For me a deciding factor as too how far a person would go to lower taxes would be:
a) -- how much inconvenience is there in any paperwork that needs to be done, updated, tracked
b) -- chances of getting caught
c) -- the money saved (not paid out)
Well:
a) If I'm spinning my wheels to to keep my story straight, or the paperwork is a PITA, then it may not be worth it (to ME) to save 5K. I place a very high value on my time. And living stress free is worth 5K a year...especially if I'm retired and want to live a CAREFREE life!
b) if people would just keep their MOUTH SHUT and under the radar, you'd be surprised what does NOT get caught. BUT if you do get caught, was it worth it.
c) IF you saved 50K in taxes over 5 years....and the penalty IF you get caught -- can only be 20K...well then it was worth it (money wise). I still wouldn't do it because of the aggravation factor. But that's just me.
Personally, IF I were gong to even get into all this. I'd pick the state with the best tax situation for me and just leave it at that. I'm not going to try to pay NO tax ANYwhere. I just don't want to be bothered with all that that entails.
It amazes me HOW STUPID some people can be, when they already KNOW they're trying to skirt the law. IF one is questioned about it...WHO in their right mind would think...just a P.O. Box or a house in FLA with no furnishings or supporting day-to-day, resident type paper trail would pass scrutiny? WHO in this day in age doesn't know your financial transactions can be tracked...so that if you say you're a resident of X state...but all your debit/credit card activity for groceries and utilities are in Y state...uh, you might have some explaining to do. I'm not even into this topic...and I could have told you that. Duh.
Tons of retired people here in New York do this and as far as I know it's perfectly legal (as you said). They have a residence in NY and a residence in Florida or wherever, and they make their Florida address their official address while in reality they still live in New York for at least part of the year (usually the summer months). The NY home then becomes a "vacation home" for tax purposes.
Honestly, I think it's the optimal solution to get around NY's high cost of living and still be able to maintain strong ties with their friends/family, their native land, familiar surroundings, etc. My parents plan on doing this in several years. One day, in 30-40 years or so, I will be retired and probably doing the same thing as well.
and some put vacation home in LLC or kids names to boot so no record they own it.
My father was a 'snow-bird' beginning in about 1980. A few times we 'settled' in one state, but mostly he stayed mobile, up until 2010. He lived in a 5th wheel travel trailer. He wintered mostly in Arizona,, and spent the rest of the time visiting in other states. His 'state-of-residency' was Nevada. Though I do not think he ever owned a home in Nevada.
Now that I settled in Maine, I see a lot of farmers here who winter-over in Florida, using 5th wheels or RVs.
There are many reasons I selected South Dakota for my residency while I traveled. Taxes were not a factor. Auto registration was important. Registration can be renewed annually by mail and no vehicle inspection is needed. Auto/RV and health insurance costs are low. South Dakota has a great many residents who travel and jury duty is easily and permanently excused. SD was also great when my driver's license was stolen. I got a temp license by email the next day and a permanent replacement mailed to me within a week. In case you have never been there, SD is a beautiful State with lots to recommend it. I would not have minded settled there permanently had the grandkids not come along.
Also, what I saw when living among these types of people, you never might guess who will turn you in so if you give out details about actually cheating, which you would be surprised how many people do and I'm talking about not legal, don't be surprised if someone comes a-knocking at your door with questions.
Former President George H W Bush declared his legal residence as a hotel room in Texas for decades to escape Washington, DC taxes. If the head of the CIA, a Vice President, and a President can do it, I have no moral qualms about picking the most tax-friendly of the three states where I own property as my legal residence. If I picked the least tax friendly of the three, it would cost me about $15K per year. I don't live anywhere 180 days per year. I pick the one that benefits me.
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