The Florida Tax Savings Guide for New Residents (2025)

Florida’s biggest financial argument is simple: no state income tax, no state estate tax. But turning that into a real number requires knowing your current state’s actual brackets — not the headline top rate. Here’s how it works, state by state.

The Baseline: Florida Charges 0%

Florida has no state income tax at any income level, and no state estate tax. That’s the entire comparison on Florida’s side. Everything else in this guide is about what you’re currently paying.

New York

New York’s top marginal rate is 10.9%, but it’s progressive — you don’t pay that rate on your whole income. A New York City resident pays an additional city income tax on top of the state rate (up to 3.876%), which is one of the only city-level income taxes in this comparison group. New York also has a state estate tax with a $7.16M exemption — well below the federal exemption, which surprises a lot of relocating buyers.

New Jersey

New Jersey’s top marginal rate is 10.75%, kicking in at $1M of income. Below that, rates step up from 1.4% to 6.37% for income up to $500,000. New Jersey has no state estate tax, which is one less thing to plan around than New York.

Illinois

Illinois uses a flat 4.95% rate — no brackets, no progressivity. Chicago itself charges no additional city income tax, so the comparison is simpler than New York’s. Illinois does have a state estate tax with a $4M exemption.

Connecticut

Connecticut’s top marginal rate is 6.99%, with brackets starting at 3%. It has a state estate tax, but with a much higher exemption ($12.92M) than New York or Illinois — meaningful for higher-net-worth movers.

Massachusetts

Massachusetts effectively has two rates: 5% on income up to $1M, then 9% above that (the “millionaire’s tax” surtax). Below $1M, the math is simpler than New York’s; above it, the gap versus Florida gets significant fast.

California

California’s top marginal rate is the highest in this group at 13.3%, on a fully progressive schedule starting at 1%. California has no state estate tax, but the income tax gap versus Florida is the largest of any state covered here at higher incomes.

The Homestead Exemption, Explained

Once you establish Florida as your primary residence, the Homestead Exemption reduces your home’s taxable value by up to $50,000, and the Save Our Homes cap limits how much your assessed value can increase each year — to 3%, regardless of how much the market actually rises. Over a decade of appreciation, that cap can matter as much as the income tax savings.

Establishing Florida Domicile

The tax benefits require actually becoming a Florida resident, not just owning a home here. That generally means filing a Declaration of Domicile, registering to vote in Florida, updating your driver’s license, and spending more than half the year in-state. Consult a CPA for how the rules apply to your specific situation — this is general information, not personalized tax advice.

Run Your Own Numbers

Every state above has a different bracket structure, so the real savings depend on your actual income and current property tax bill. The Tax Savings Calculator runs the exact math for your state, income, and home value.

FAQ

Does Florida have a state income tax? No — Florida is one of a small number of states with no state income tax at any level.

What is the Save Our Homes cap? Once a Florida home is homesteaded, its assessed value can increase by no more than 3% per year, regardless of how much market value rises.

Do I need to give up my old state residency to get Florida’s tax benefits? Yes — the benefits apply to Florida residents (domiciled here), not just property owners.