Washington’s New Millionaire Tax Is Already Pushing Wealthy Residents Toward Florida, Realtors Say

Washington state’s high earners are shopping for real estate in Florida ahead of a new state income tax on millionaires, according to a luxury property specialist who says the deals are already closing.

“I would say that the first thing is taxes. Income tax in Florida is 0%, and in Washington state, it’s 9.9% as of January 2028,” Margit Brandt, a luxury real estate specialist, told Fox News Digital. “Capital gains in Florida is also 0%, and in Washington state, it’s 7%. I just think that they’ve created this really punitive tax environment that’s unappealing to the high-net-worth individuals who are the high earners in Washington State, and that’s been the biggest kind of feeder for our market here.”

Washington’s capital gains tax is tiered: the first $1 million in taxable capital gains is taxed at 7%, with amounts above that threshold taxed at 9.9%. Real estate itself is exempt from the capital gains tax.

The relocation interest follows passage of a 9.9% tax on annual adjusted gross income above $1 million, approved by the Democratic-controlled Washington Legislature and signed by Gov. Bob Ferguson. The tax takes effect Jan. 1, 2028, with the first returns due in April 2029 — a significant shift for a state that has never had a general individual income tax. The law is currently facing a court challenge over its constitutionality.

“We’ve seen actual deals — big deals — happen with high earners from Washington state,” Brandt said. “This is not hypothetical. These are closed transactions with people setting up a whole new life here in Florida.”

Survey Shows Growing Exodus Sentiment

Comprehensive migration data tied specifically to the new tax aren’t yet available, but a recent survey from the Association of Washington Business, the state’s chamber of commerce and manufacturers group, found 24% of business respondents were considering moving their businesses out of Washington — up from 17% the previous quarter and nearly triple the rate from 16 months earlier.

The same survey found 55% of business leaders said they were considering relocating their personal residence to another state. In Spokane County, near the low-tax Idaho border, that figure rose to 67%.

High-Profile Departures

Individual cases are surfacing alongside the survey data. Jesse Proudman, founder and CTO of the privacy-focused AI platform Venice.ai, told Fox News Digital in May he was leaving Washington, describing a region once seen as a “startup sanctuary” as increasingly unwelcoming to business leaders.

Starbucks, meanwhile, announced in April it will invest $100 million in a new support office in Nashville, Tennessee — a state with no individual income tax — expecting 2,000 support jobs there over five years, including newly created roles, in-housed functions and teams shifted from Seattle.

Brandt said the calculus for wealthy transplants goes beyond tax bills. Safety, culture and quality of life are drawing buyers to Florida, Texas and the Carolinas alike, she said.

“If they’re looking at a $10 million house, a $20 million house, a $50 million house, or a $100 million house, it’s more than just a house. It’s a whole new lifestyle,” Brandt said.

She pointed to Florida’s lack of a state estate tax and its proximity to the Caribbean as particular draws for multi-generational wealth. “They want safety, security, good schools, and to set up their financial future. Florida is just such an easy landing place, and I think we’re going to see way more of it in the coming years,” she said.

Political Response Limited

A spokesperson for Sen. Patty Murray, D-Wash., told Fox News Digital: “This is an issue subject to initiative, currently on the ballot in our state. For that reason, I’m limited in what I can say on the issue.”

Fox News Digital also reached out to Sen. Maria Cantwell, D-Wash., Washington Gov. Bob Ferguson, state Sen. Jamie Pedersen, D-Seattle, who authored the tax bill, and Seattle Mayor Katie Wilson.