Escape from New York

New Yorkers moving out of state save more money on housing than taxes

  • Families moving out of state typically save 15 times more on cheaper housing than taxes
  • For the top 20 moves, annual mortgage savings average $18,300, and rent savings are $5,600
By Emily Myers | February 7, 2023 - 12:30PM

Manhattanites moving to Essex County, New Jersey, save an annual average $37,871 on their mortgage and $12,948 on rent. Tax savings are a slim $729.

photosvs/iStock/Getty Images Plus via Getty Images

When you move out of New York State the real savings are on housing not taxes. That's according to the non-profit Fiscal Policy Institute, and it runs counter to the common assumption that people are leaving New York because of high taxes. You probably know someone who’s left New York for Florida in the past few years—64,577 New Yorkers switched their driver's licenses to Floridan ones last year, as reported by The New York Post.

It's true Florida and Texas saw the most migration from other states last year, according to a report from the National Association of Realtors, and sunshine and low taxes are certainly big attractions. However, the tax savings from the most prevalent out-of-state relocations from New York are a small fraction compared to the savings on rent or mortgage payments for a typical family.

According to the Fiscal Policy Institute report, of the top 20 largest county-to-county moves out of New York State, annual mortgage costs were on average $18,300 lower outside New York, and rents $5,600 lower but the tax savings were just $1,200. The data suggests lower taxes are less of a pull than lower housing costs. 

"This report confirms that New Yorkers are leaving our state because the cost of living continues to rise, not because of taxes," says Nathan Gusdorf, Fiscal Policy Institute's executive director. He says the state's fiscal policy should focus on turning New York into a place where people can afford to live and raise families—including investing in universal childcare and high-quality public education as well as affordable housing and reliable public transit.

"Increasingly unaffordable housing and childcare, combined with shrinking state services, will continue to drive both working people and businesses out of our state," he says. 

Mortgage and rent savings dwarf tax savings

With average mortgage costs 34 percent lower and annual rent 19 percent lower on average for the top 20 out-of-state moves, the typical family leaving New York saves 15 times more from lower housing costs than they do from lower taxes. 

The report identifies moves from Manhattan to Hudson County, New Jersey, as the most prevalent migration pattern with rent savings of $6,444 and mortgage savings of $36,622. Tax savings for these movers were $729. New Jersey isn't a low tax state but one benefit of a move from New York City to New Jersey is that you no longer pay city income taxes. 

 The chart shows estimated annual housing and tax savings for a median-income family for the top 20 county-to-county migration flows from New York. 

The chart shows estimated annual housing and tax savings for a median-income family for the top 20 county-to-county migration flows from New York. 

The biggest tax savings identified in the data were, as expected, for households moving to Miami-Dade County, Florida. Manhattanites who made this move saw an average $5,071 reduction in their taxes. However, the housing cost savings for this group is substantial—movers to Miami-Dade saw the largest mortgage savings of $41,141. Rent savings were an average of $7,860. 

Is moving to the suburbs worth it?

The discussion about whether to move to the suburbs or stay put is ongoing for many NYC households and it usually focuses on housing costs and commute times. There are obviously lots of personal factors at play but the appeal of the suburbs is largely that you can increase your square footage and, if you're looking to buy, get a three-bedroom, two-bath house in the $800,000 price point—in the city, that’s closer to $2.5 million. In addition, buying in the city involves the added complexity of co-op board approvals, high finance requirements, and unique city taxes. 

Indeed, the report finds in six of the 20 county-to-county pairs—where households moved from and to—median home prices in the New York origin county were twice as high as in the destination county.

Rents in NYC have also remained stubbornly high after reaching records last year. According to the report, the median housing costs were substantially lower in the top destination counties outside NY state. This includes Hudson County, Bergen County, and Essex County in New Jersey, and Fairfield County in Connecticut.

The report notes, New York housing costs were higher than housing costs in the destination county for all groups except residents of the Bronx who headed to Fairfield County, Connecticut or Bergen County, New Jersey. Three other major New York suburban counties—Rockland, Nassau, and Suffolk—all have higher median home prices than neighboring out-of-state suburbs (even though these counties are not in the top 20 county-to-county migration pairs).

 

Emily Myers

Senior Writer/Podcast Producer

Emily Myers is a senior writer, podcast host, and producer at Brick Underground. She studied journalism at the University of the Arts, London, and graduated with a MA Honors degree in English Literature from the University of Edinburgh. As host of the Brick Underground podcast she has earned three awards from the National Association of Real Estate Editors.

Brick Underground articles occasionally include the expertise of, or information about, advertising partners when relevant to the story. We will never promote an advertiser's product without making the relationship clear to our readers.
topics: