Homebuyers Migrating To Low-Taxed States

Homebuyers Migrating To Low-Taxed States To Purchase Their Homes

Gustan Cho Associates are mortgage brokers licensed in 48 states

This ARTICLE On Homebuyers Migrating To Low-Taxed States To Purchase Their Homes Was PUBLISHED On February 26th, 2020

Why do home buyers migrate to low-tax countries to buy their homes

The U.S. economy is booming.

  • Homeownership numbers are at a record historic high
  • More and more renters are buying homes
  • Consumer confidence levels are at an all-time high
  • The stock market is setting records and is at historic highs
  • The Trump economy is on fire with no signs of any recession and/or slow down
  • Wages are at an all-time high
  • There are more available high-paying jobs than there are workers
  • Unemployment numbers have hit a 50-year low
  • Homebuilders are selling more homes than they have available
  • Therefore, they are buying up land like never before
  • Home prices are increasing at record levels
  • Due to rising home prices, HUD and FHFA are increasing loan limits
  • Adding to the demand for homes, many lenders have launched Non-QM and alternative financing mortgage programs where more homebuyers can qualify for homes
  • However, not all states are thriving
  • There are many states that are struggling and on the verge of bankruptcy
  • Illinois and New York are two of those states that are facing major budget deficits
  • This is because of high taxes, corruption, and incompetent politicians
  • For example, Illinois, under the leadership of J.B. Pritzker, is seeing a record number of taxpayers and businesses fleeing the state to other states with low taxes
  • Illinois Governor J.B. Pritzker, who is currently under criminal investigation for property tax fraud, seems to keep on increasing taxes and creating new taxes
  • In general, high-property taxes stunt housing sales and growth
  • High state taxes will force taxpayers and businesses to flee the state to other lower-taxed states
  • High taxes, high cost of living, and public corruption are the main reasons why taxpayers and businesses are fleeing their state to another well-run state

In this article, we will discuss and cover why Homebuyers Migrating To Low-Taxed States To Purchase Their Homes.

Homebuyers Migrating To Low-Taxed States Due To Politicians Increasing And Creating New Taxes

Why home buyers migrate to low-tax countries

It is not how much you make but what you spend. States like Florida, Tennessee, Alabama, Mississippi, Kentucky, Texas, Georgia, North Carolina, and other Republican states are thriving.

  • They are raking in billions of revenues
  • Politicians, from the state governor on the chain of command, are running their states like a business
  • Many states with surpluses are lowering taxes
  • A handful of states like Florida, Tennessee, Nevada have no state income taxes
  • The lower taxes are attracting Businesses and Homebuyers Migrating To Low-Taxed States
  • They are only spending with the budget they have and not running the government at a deficit
  • However, a handful of states run by Democrats are running state government at a deficit
  • Illinois is a perfect example
  • Illinois has no intention of cutting spending
  • Actually, they are increasing spending even though they are running state government at a deficit
  • The pension debt is mounting and there is no sight of breaking even in the foreseeable future
  • Even with major budget problems, lawmakers are proposing an increase of Illinois lawmakers
  • The newly elected Illinois governor, J.B. Pritzker, seems the only solution he has is raising taxes and creating new taxes
  • Pritzker is lobbying to change the state’s flat-tax to a new progressive tax system
  • This will most definitely backfire on him where wealthy Illinoisans will flee the state in record numbers
  • At the end of the day, Illinoisans are the folks that are getting hurt
  • Illinois has the nation’s second-highest property tax rate
  • Illinois property values have been stunted for over a decade due to high taxes

While other states like Florida, Indiana, Tennessee, Texas are thriving and experiencing record-high home values, Illinoisans are facing their state on the verge of bankruptcy. Increasing taxes may stop the bleeding temporarily. However, it will backfire and make matters worse if taxpayers and businesses are flocking out of the state to other lower-taxed states.

Data Of Homebuyers Migrating To Low-Taxed States

Studies released by George Mason University’s Mercatus Center show date that the most financially solid states in the United States are Republican-led states with low property taxes. The ten worst states with major budget crisis and on the verge of bankruptcy are all states with high taxes as well as high property taxes that are led by Democrats. The rankings in the fourth-annual “Ranking of the States by Fiscal Condition” report are based on studies of audited financial statements for 2015 covering five measures that gauge the states’ ability to pay bills, avoid budget deficits, and meet long-term spending needs and cover pension liabilities.

See the chart below:

What is the Solvency Scorecard

What Experts Say

Michael Gracz is an Associate Economist at Gustan Cho Associates. He has been studying this report and reviewing the data released.
Data on the state’s political leanings and/or tax burdens are not included in The Mercatus Report.

Other Surprising Numbers And Data

What are the other surprising numbers and figures

Leaders of high taxed states need to really look at ways of solving the state’s deficit without raising taxes. Many politicians have huge egos that they do not want to follow their neighboring state’s financial model. For example, Indiana is one of the states that is thriving. A large percentage of Illinoisans flee to Indiana. However, Illinois politicians think they know it all and do not want to follow the business model of other states that are thriving. This is not just Illinois but many financially stressed states.