Luxury real estate specialist Margit Brandt reports that Washington state high earners are increasingly purchasing property in Florida to avoid a new 9.9% income tax. The tax applies to annual adjusted gross income above $1 million and takes effect on Jan. 1, 2028. Washington currently has no individual income tax, making this legislation a significant change for the state's wealthy residents.
Brandt told Fox News Digital that the tax environment in Washington is unappealing to high-net-worth individuals, who have become a major source of buyers for the Florida market. She noted that Florida has a 0% income tax rate, while Washington's rate is 9.9% as of January 2028. Capital gains tax also differs, with Florida charging 0% and Washington charging 7% on the first $1 million in taxable gains and 9.9% on amounts above that threshold. Real estate is exempt from Washington's capital gains tax.
The Democratic-controlled Washington Legislature passed the levy, and Gov. Bob Ferguson signed it into law. Initial tax returns are due in April 2029. The legislation faces a court challenge regarding its constitutionality, but real estate insiders say it is already influencing relocation decisions. Brandt stated that closed transactions involving high earners from Washington have occurred, describing the shift as not hypothetical.
A recent survey by the Association of Washington Business (AWB) found that 24% of respondents are considering moving their businesses out of Washington. This figure is up from 17% in the previous quarter and nearly triple the rate recorded 16 months ago. Additionally, 55% of surveyed business leaders said they are considering moving their personal residence to another state. In Spokane County, near the border with low-tax Idaho, that number climbs to 67%.
High-profile departures reflect this trend. Jesse Proudman, founder and CTO of Venice.ai, told Fox News Digital in May that he was leaving Washington, describing the region as increasingly hostile to business leaders. In April, Starbucks announced a $100 million investment to establish an additional support office in Nashville, Tennessee. The company expects to create 2,000 support jobs over the next five years, including newly created positions and teams moved from Seattle.
Brandt said that factors beyond taxes, such as safety, culture, and quality of life, drive wealthy transplants to Florida and other states like Texas and the Carolinas. For buyers looking at properties ranging from $10 million to $100 million, the move represents a new lifestyle rather than just a housing purchase. Florida's lack of a state estate tax and its proximity to the Caribbean appeal to multi-generational wealth seeking safety and good schools.
Fox News Digital reached out for comment to Sens. Patty Murray and Maria Cantwell, both D-Wash., Gov. Ferguson, State Sen. Jamie Pedersen, who drafted the bill, and Seattle Mayor Katie Wilson.